California Asks Pot Dispensaries To Pay Taxes Before Getting Seller's Permit

Taxes on California’s cannabis industry could top a billion dollars a few years from now. But along the way, the state is looking to bring in gray-area operators who haven’t been paying taxes, and get them to square up.

Whether your business is growing weed for adult use or running a storefront selling it, the Department of Tax and Fee Administration says you’ll need a seller’s permit. To get one, you can’t have years of unpaid taxes.

But getting people to pay up is an awkward balancing act, says Hilary Bricken, whose Los Angeles legal practice centers around the pot business. She says the state wants to avoid driving them underground.

“Part of it is we want to compete with, and/or eliminate the black market," Bricken said.  "And if you drive people to ground by excluding them or creating too many barriers to entry, you can actually hurt yourself as the state when it comes to that kind of policy decision."

For its part, the department says it’s willing to work with folks on a case-by-case basis. After all, nobody’s going to pay their taxes if they’re shut down completely.