An Excise Exploration: Unpacking Minnesota’s Cannabis Taxation

Minnesota is poised to become the 23rd state to legalize cannabis use for those 21 and older. The bill legalizing cannabis use spans more than 300 pages and encapsulates a wealth of information.

It includes the formation of the Office of Cannabis Management to oversee industry regulation, a mechanism for those with marijuana convictions to expunge their records and a framework for 15 different cannabis license types. Businesses can apply for these licenses, which include cannabis cultivation, manufacturing and retail.

The bill also introduces a Gross Receipts Tax of 10% as an excise tax on the sale of cannabis products. Furthermore, the state’s prevailing sales tax of 6.875% will also be applicable to cannabis sales. Consequently, consumers will effectively pay a cumulative tax of 16.875% at the point of purchase. This means that an outlay of $100 for cannabis products will, with taxes included, amount to a total payment of $116.88.

Read the full article published on MN CPA.

By Ari Hoffnung, CEO of Bridge West Consulting and published in MN CPA.

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Disclaimer: This blog post is for informational purposes only and should not be used as a substitute for professional tax advice. Always consult with your Bridge West tax professional before making any decisions about your cannabis business’s taxes.

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