L.A. City Council Considers Tax Amnesty Program for Cannabis Businesses
The Los Angeles City Council is exploring a tax amnesty program aimed at supporting licensed cannabis businesses struggling with significant tax debt. The initiative seeks to capture approximately $400 million in unpaid taxes while offering relief to over 500 delinquent operators.
Program Details and Potential Benefits
In a 13-0 vote on Tuesday, March 3, 2026, the council approved a proposal from the Office of Finance to develop the program. The proposed amnesty would waive penalties and interest on unpaid taxes and offer installment agreements of up to 36 months for cannabis operators who participate. Councilwoman Imelda Padilla, chair of the Government Operations Committee, emphasized the opportunity to bring businesses into compliance and support the industry’s stability. [Source: MyNewsLA]
Allocation of Recovered Funds
Revenue generated through the amnesty program would be allocated as follows:
- 20% to the General Fund and the Office of Finance
- 40% to the Los Angeles Police Department and the City Attorney’s Office for illegal cannabis enforcement
- 40% to the Community Investment Department for Social Equity Cannabis Businesses grants
Past Amnesty Program Success
The city previously implemented a similar program in fall 2020, which generated approximately $20.6 million from 6,190 cannabis businesses. That program offered a 12-month installment plan for resolving outstanding taxes. [Source: MyNewsLA]
Industry Challenges and Tax Burden
As of October 2, 2025, Los Angeles had 738 licensed cannabis businesses. The current tax rate for cannabis businesses in the city exceeds 40%, including a 10% local tax. Many businesses have struggled to keep up with these payments, leading to the current $400 million in outstanding taxes. Approximately $35 million of this amount is accrued interest, and $100 million is in penalties. [Source: MyNewsLA]
Breakdown of Delinquent Accounts
The outstanding debt is distributed as follows:
- 329 businesses owe less than $200,000
- 48 businesses owe more than $2 million each
Concerns and Calls for Systemic Change
Daniel Sosa, owner of four licensed cannabis businesses in Los Angeles, urged the city to take immediate action and criticized the council for not adequately addressing illegal cannabis shops. He emphasized the need for systemic change, including lower taxes, to support the industry. [Source: MyNewsLA]
Next Steps
The proposed program requires approval from both the City Council and Mayor Karen Bass through a new ordinance later this year. [Source: MyNewsLA]
Cash Pickup Service for Cannabis Businesses
The City of Los Angeles has partnered with Dama Financial to provide a secure cash pickup service for cannabis businesses. This service, which includes a 2% transaction fee and a $75 pickup fee, allows businesses to securely deposit funds for local and state tax and permit liabilities. [Source: Los Angeles Office of Finance]