The state of California says 10 marijuana dispensaries in Los Angeles owe $14.4 million in taxes. A public auction was held to compensate for these fees on property seized from the companies.
But after the hammer came down, the state only made $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 Excise and Excise said in a press release announcing the public auction of the seized merchandise. This was the first time the agency auctioned off personal property seized during law enforcement 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 drug, which included glass pipes, bongs, televisions, furniture and assorted office supplies. At the February 16 auction in Los Angeles, the items were sold in 10 lots, all of which were purchased, with many listed in “as is” condition.
“Seizing and auctioning the property of cannabis companies that evade the law is a tool to recover taxes owed to the state,” Nick Maduros, director of the Tax and Excise 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 are required to 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 tax, according to available data.
