Thank you for choosing Smokin Aces Cannabis! We look forward to a long and mutually beneficial relationship with you and your business. The following information is intended to help facilitate a smooth process for placing orders, receiving deliveries, and making payments.
The California Bureau of Cannabis Control regulations requires all licensed cannabis businesses to report the production and movement of products through the Metrc track & trace system. BCC guidelines stipulate that all Metrc transfers between license holders must be completed within 24 hours. Failure to complete Metrc transfers from Smokin Aces Cannabis within the 24-hour window will result in a hold on all orders, deliveries, and credits to your account.
All accounts are opened with Cash-on-Delivery (COD) payment terms. Your full balance will be due upon delivery. If funds are not available at delivery, our driver will not unload the product. Net terms may be available at the discretion of our Sales Director and Accounting departments. Accounts on Net payment terms must still pay the excise tax upon delivery of orders.
If paying by check, make the check to Smokin’ Aces Cannabis LLC
For any orders with a cash payment over $10,000, the IRS requires that we submit an 8300 Form within two weeks of the payment. An 8300 will be provided upon receipt of your first order over $10,000. The form only needs to be submitted by you one time unless the information has changed. After we have your information on file, we will complete and submit the 8300 Form as necessary
A Note on Excise Tax
Per the CDTFA definition of an Arms Length Transaction, all orders are subject to an excise tax on the full wholesale value of the invoice. The tax rate may vary and the current rate can be verified through the CDTFA. In an arm’s length transaction, the average market price is the retailer’s wholesale cost of the cannabis or cannabis products sold or transferred by a cultivator, manufacturer, or distributor to a cannabis retailer, plus a mark-up determined by the CDTFA.
The wholesale cost is the amount paid by the retailer for the cannabis or cannabis products, including any transportation charges.
The example below provides a sample scenario and guidance on how to determine the average market price in an arm’s length transaction:
Example – As a distributor, you sell cannabis products to a retailer in an arm’s length transaction for $1,500 plus a $100 transportation charge. You allow the retailer a 25 percent discount if the retailer pays you when the cannabis products are delivered. The retailer earns the 25 percent discount of $375 ($1,500 x 25%), reducing the cost to $1,125 ($1,500 – $375). If this transaction occurs on or after January 1, 2020, the retailer’s wholesale cost used to calculate the average market price in an arm’s length transaction is $1,225, calculated as follows:
|Cost of the Cannabis Product||$1,500.00|
|Less 25% Discount||($375.00)|
|Retailer’s Wholesale Cost||$1,225.00|
The average market price and the cannabis excise tax due are calculated as follows:
|Retailer’s Wholesale Cost||$1,225.00|
|Plus, the current mark-up ($1,225 x 80%*)||$980.00|
|Average Market Price||$2,205.00|
|15% Cannabis Excise Tax Due ($2,205 x 15%)||$330.75|
For this transaction, you collect $330.75 in cannabis excise tax from the retailer plus the wholesale cost of $1,225.00 for the cannabis products and transportation charge. *This example assumes a mark-up rate of 80 percent. You must use the rate in effect at the time of the transaction. The current mark-up rate can be found on our website located on the Special Taxes and Fees rate page at www.cdtfa.ca.gov/taxes-and-fees/tax-ratesstfd.htm, under Cannabis Taxes.
Product returns can be made in two ways. A full case of a product may be rejected by a retailer upon delivery if it does not meet the retailer’s standards or if there’s an issue with the METRC transfer information (For example, if the batch ID does not match the COA). These items will be returned to the Smokin Aces Cannabis warehouse and credited to the invoice once the rejection has been completed by the retailer in METRC.
If a customer returns a specific product, the retailer must inform Smokin’ Aces of the return within 5 business days. When handling a customer return, please provide the full product description, batch number, METRC ID number, the issue with the product, a photo of the returned product, and a receipt when available. Depending on the nature of the complaint, Smokin’ Aces Cannabis may issue a credit for that specific product to be applied to a future invoice. Returns cannot be made for products that are nearing or past their expiration date without prior approval from our Sales Director.