Cannabis Taxes

Medical Cannabis Taxation

There are two taxes associated with the sale of medical cannabis. Applicants will be required to obtain applicable tax permits as part of the application process.

  • Medical cannabis cultivators are subject to a 5% excise tax on the first sale/transfer of medical cannabis.
    • Excise tax is due if the cultivator sells to a processing facility.
    • Excise tax is due on the transfer of cannabis between related entities.
  • Medical cannabis dispensaries will charge the standard 7% sales tax to cardholders at the point of sale. Dispensaries will also be responsible for special tax levies in the cities of Jackson & Tupelo.

A sales tax account and permit will be required by medical cannabis cultivators and medical cannabis processors if making sales of tangible personal property (i.e. medical cannabis) (MS Code Ann §27-65).

A direct pay permit may be required by medical cannabis processors if the processor is manufacturing a medical cannabis product.

For more information regarding Sales Tax, click here.

Applicable Income tax or Withholding tax may be due for any medical cannabis establishments under this program including those licensed by the Mississippi Department of Health.

All taxes collected must be remitted to the Mississippi Department of Revenue. You may register for a cannabis excise tax account on TAP.

Medical Cannabis Excise Tax Regulation

Medical Cannabis Establishment Sales Tax Regulation


Fair Market Values for Cannabis Excise Tax

The fair market value applicable to cannabis excise tax is now available for public viewing. Please read the Notice of Fair Market Values for Cannabis Excise Tax.

Sales Or Transfers From A Cultivation Facility To A Medical Cannabis Establishment  

A 5% excise tax shall be applied to the sales price of a cultivation facility’s first sale or transfer of cannabis flower or cannabis trim to a medical cannabis establishment.

Sales Or Transfers From A Cultivation Facility To A Medical Cannabis Establishment With Common Ownership  

The 5% excise tax shall be calculated using the fair market value of the cannabis flower or cannabis trim on the first sale or transfer of cannabis flower or cannabis trim to a medical cannabis establishment having common ownership with the cultivator. The fair market value is only used when the cultivator shares common ownership with the medical cannabis establishment.

The fair market value of medical cannabis flower and medical cannabis trim is set by the Department for the purposes of levying the cannabis excise tax pursuant to Senate Bill 2095 of the 2022 Regular Legislative Session on the first sale or transfer of medical cannabis flower or medical cannabis trim between cultivators and other common ownership medical cannabis establishments. MS Administrative Code 35.VIII.4.01

The fair market values effective July 1, 2022 are as follows:

Category

Fair Market Value

Flower sold to common interest establishment

$3,200 per lb

Trim sold to common interest establishment

$640 per lb

Beginning January 1, 2023, the MDOR shall recalculate and adjust the fair market value of cannabis flower and cannabis trim twice per calendar year on January 1 and July 1

If you have any questions, please contact the Sales Tax Department at 601-923-7015.


Sales Tax Permit Application

Register for a Sales Tax account and apply for a permit on TAP. This process could take up to three weeks, so please apply at your earliest convenience.  To complete an application for a dispensary license, you must have FIRST received a sales tax permit ID.  

When applying, use the following NAICS codes:

Type of Licensure

NAICS Code

Cultivator/Grower

111419

Processor/Wholesaler

424590

Transporter (local freight)

484220

Transporter (long distance)

484230

Testing Facility

621511

Dispensary

453998

Waste Disposal

562211