High-Road Cannabis Tax Credit (HRCTC)

Rewarding Cannabis Retailers for Creating Opportunities

New HRCTC cannabis tax credit provides eligible California cannabis businesses with over $10,000 per full-time employee

What is the High-Road Cannabis Tax Credit?

The High-Road Cannabis Tax Credit (HRCTC) is a California income tax credit that incentivizes cannabis retailers with Type 10 or Type 12 licenses to provide full-time jobs with benefits in their communities. A new program in 2023, the HRCTC provides qualified licensed dispensaries with credits of up to 25% of qualified employee costs (including wages and benefits). Each eligible employee can generate income tax credits worth $10,000 to $25,000 up to a maximum total of $250,000.

Does Your Dispensary Qualify for HRCTC?

To qualify for the High-Road Cannabis Tax Credit, your business must:

  • Have a Type 10 or Type 12 California license
  • Have full-time employees (35+ hours per week)
  • Offer health insurance and retirement benefits to employees

Why Apply for the HRCTC?

  • Keep more of your profits
  • Reduce state tax liability 
  • Get incentivized to provide excellent employment opportunities
  • Carry forward any unused credit

What Omega Can Do For You

Claiming HRCTC can be complicated.  We make it easier.

Our tax credit experts work closely with your team to ensure your business is awarded a tax credit during the application process. We build a High-Road Cannabis Tax Credit application that satisfies California’s requirements and prepare end-of-year compliance reporting to substantiate your credit eligibility.

Why Choose Omega?

At Omega, we work with small to mid-sized businesses to take the complexity out of cannabis tax credits in California. Our team understands the intricacies of corporate tax programs, but we also understand that what may be true for a multinational corporation may not apply to a smaller business. We can work with you to evaluate opportunities and provide “go” or “no go” feedback on the viability of different tax credits for cannabis businesses as they apply to your particular fact pattern.

Reducing your tax liabilities starts here.

Claiming HRCTC: How It Works

We evaluate your financial records and projections to determine if you will qualify for HRCTC.

We assist you to submit an HRCTC application. The first round opens in July 2023.

At year-end, we help you build a compliance report to satisfy the application requirements.

Your tax preparer includes the results in your income tax return the following year as a direct offset to your tax liability.

Engage Omega

  • We simplify complicated cannabis tax credits, helping dispensaries of all sizes to receive the government incentives they deserve
  • We are leading experts in tax credit processing and adhere strictly to federal and state regulations
  • Our knowledgeable team has several decades of combined experience serving small and medium-sized businesses

Substantial tax savings could be waiting for you.

History of the HRCTC

In 2016, California voters approved Prop 64, which legalized the use and sale of recreational cannabis for adults. Prop 64 also levied robust taxes on commercial sales that put licensed cannabis dispensaries at a cost disadvantage compared to the illicit market. The substantial difference in overhead costs left room for grey and black markets to offer significantly lower prices, driving consumers away from safe and secure retailers and toward unregulated products.

The High Road Cannabis Tax Credit was created by California Assembly Bill 195 to help licensed cannabis retailers reduce their tax liabilities to overcome the cost difference between licensed and illicit markets and help bring consumers back to legally-compliant retailers. This new tax credit for the cannabis industry also incentivizes storefront dispensaries to offer full-time employment opportunities, adequate compensation, retirement benefits, and employer-sponsored healthcare plans. By encouraging the creation of better jobs at legal dispensaries, the HRCTC also aims to help stimulate the communities that are home to licensed cannabis retailers. Learn more about HRCTC.