The state of California says 10 Los Angeles marijuana dispensaries owe $14.4 million in taxes. A public auction was held to offset these fees with assets confiscated from the companies.
But after the gavel was hit, the state only won $2,075, according to officials.
Nine of the dispensaries were operating illegally and one was a legal business but owed back taxes, the California Department of Tax and Fee Administration said in a news release announcing the public auction of the seized assets. This was the first time the agency auctioned off personal property seized during police raids to try to recover fees owed to the state, according to the agency.
The agency partnered with the California Highway Patrol to sell the property, which included glass bongs, hookahs, televisions, furniture and miscellaneous office supplies. At the February 16 auction in Los Angeles, the items were sold in 10 lots and all were purchased, many of them listed in “as is” condition.
“The seizure and auction of properties of cannabis businesses that evade the law is a tool to recover taxes owed to the State,” Nick Maduros, director of the tax and fee agency, said in a statement.
The agency said in a statement that its intent is to “discourage unlicensed cannabis activities and help level the playing field for legitimate businesses that pay their taxes.”
In 2022, according to the agency, nearly $90 million in products and cash were seized from businesses during 2,200 inspections.
Legal cannabis businesses operating in California must collect a 15% excise tax from their customers at the time of sale. California generated more than $621 million in excise taxes in 2023 and more than $461 million in sales taxes, according to available data.
