In 2014, Colorado and Washington became the first states to allow the sale of cannabis products. Less than a decade after, a bulk of states now allow the distribution of medical and/or recreational marijuana, or have ballot initiatives in place that would practise so.

The map below from the Federation of Revenue enhancement Administrators shows the status of marijuana laws across the U.s.a..

Map of the United States showing legal marijuana stats by state.

Image source: Federation of Tax Administrators (2022).

Legalization of cannabis products has been a boon for state budgets, with states reporting a combined full of $10.4 billion in tax revenue from cannabis sales equally of the shut of 2021, not including any acquirement produced past medical marijuana distribution. Local towns and cities with thriving marijuana operations have also generated millions.

Here are the statistics on how much states make from marijuana taxes, how they revenue enhancement cannabis, and what they use that money for.

Marijuana taxation acquirement by state 2021

The table beneath shows the revenue collected in states with operational marijuana programs in 2021. Full revenue enhancement collected varies depending on state population, how long the program has been established, and the method of taxation.

State

2021 marijuana tax revenue

Alaska

$xxx,054,250

Arizona

$219,413,828

California

$1,294,632,799

Colorado

$423,486,053

Illinois

$317,074,562

Maine

$4,910,962

Massachusetts

$176,731,045

Michigan

$246,657,520

Nevada

$157,752,000

Oregon

$178,262,488

Washington

$559,500,000

A number of states have legalized recreational marijuana but have a less-than-fully operational market. In 2021, the Tax Foundation has estimated excise tax revenue for states with a market that has been operational for at least iii years. Here'south how much these states may stand to brand once their markets are fully established:

Country

Estimated annual marijuana excise tax revenue from fully operational market

District of Columbia

$26,605,996

Montana

$35,142,502

New Jersey

$158,974,353

Vermont

$27,313,974

Data source: Tax Foundation (2021).

Of class, these states aren't likely to meet these numbers in excise tax revenue until at to the lowest degree three years afterwards they establish a market. Seeing numbers in the $2–$10 one thousand thousand range is more probable in early years.

Merely these states are taking steps to bring in some of that revenue, even if they're moving slowly.

How much revenue are other states leaving on the tabular array?

Using average excise revenue enhancement figures and the number of marijuana-using residents in each land, the Tax Foundation estimated the potential excise tax revenue with a market established for at to the lowest degree three years.

Hither's what they found:

State

Potential Marijuana Tax Acquirement

Alabama

$92,217,856

Arkansas

$59,314,764

Delaware

$24,566,974

Florida

$448,740,070

Georgia

$198,400,771

Hawaii

$28,453,985

Idaho

$33,295,445

Indiana

$157,009,061

Iowa

$l,183,462

Kansas

$42,058,743

Kentucky

$83,008,154

Louisiana

$81,616,779

Maryland

$135,837,117

Minnesota

$122,072,389

Mississippi

$47,304,242

Missouri

$119,222,374

Nebraska

$35,975,930

New Hampshire

$44,163,575

Northward Carolina

$182,947,622

North Dakota

$13,231,599

Ohio

$220,827,478

Oklahoma

$67,680,000

Pennsylvania

$244,553,615

Rhode Island

$35,455,500

South Carolina

$96,680,914

Tennessee

$132,509,552

Texas

$397,424,206

Utah

$44,428,908

West Virginia

$38,327,540

Wisconsin

$117,791,078

Wyoming

$10,054,045

Data source: Taxation Foundation (2021).

Medical marijuana taxation drove

Not all states break down their revenue reports past medical versus recreational marijuana, simply the table below shows the sources of revenue enhancement revenue by type of cannabis use when data is available.

State

Revenue from Medical Marijuana

Acquirement from Developed Use Recreational Marijuana

Arizona

$50,002,000

$63,413,000

Maine

$3,969,914.00

$941,048 for recreational

Nevada

$147

$157,752,000

Total taxation collections by state

Colorado and Washington were leaders in the recreational marijuana movement, acting every bit early as 2012 to move toward legalization. Equally a result, information technology comes as no surprise that they've generated more revenue from marijuana taxes than other states, some of which take had an operational marketplace for 2 years or less.

Still, the tables below show the tremendous potential for states to generate significant revenue over time. In fact, the Tax Foundation estimates the market for legal marijuana could be worth every bit much equally $thirty billion by 2023.

With states facing budget shortfalls resulting from COVID-xix, acquirement from recreational marijuana could exist a much-needed lifeline in locations that pursue legalization or facilitate the expansion of electric current markets.

State

Outset year of tax collection

Total revenue nerveless (as of end of 2021)

Alaska

2017

$85,901,000

Arizona

2021

$217,553,000

California

2018

$iii,362,314,514

Colorado

2014

$2,018,933,005

Illinois

2020

$369,858,000

Maine

2018

$nine,953,000

Massachusetts

2019

$280,523,672.43

Michigan

2020

$292,357,520

Nevada

2018

$431,877,703

Oregon

2016

$586,628,394

Washington

2015

$2,346,930,000

Now let's accept a look at how cannabis taxation revenue has grown over the years for each land -- as well as how those states are using that money.

Alaska's marijuana taxation revenue

Alaska approved the legalization of marijuana in 2014 nether Ballot Measure 2. Retail sales began in Oct of 2016. The Marijuana Command Board was tasked with both licensing and tracking cannabis operations statewide.

Year

Alaska state marijuana tax revenue

2017

$i,749,497

2018

$10,801,357

2019

$xix,082,542

2020

$24,213,296

2021

$thirty,054,250

How does Alaska tax marijuana?

Alaska taxes cultivators per ounce and type: $50 per ounce for mature flowers, $25 per ounce for immature flowers, and $1 for each clone.

How does Alaska spend marijuana tax revenue?

  • 25% to the general fund.
  • l% to the Department of Public Condom, Wellness and Social Services, and Department of Corrections.
  • 25% to the Marijuana Education Fund.

Arizona'southward marijuana taxation acquirement

Arizona voters approved Proposition 216, the Marijuana Legalization Initiative, in 2020. This ballot initiative legalized recreational marijuana under the purview of the Arizona Section of Health and Homo Services. DHS began to license retail establishments on Jan sixteen, 2021.

In its outset year of operations, Arizona collected more than $217 million in revenue enhancement acquirement from both adult use sales, medical utilize sales, and excise taxes.

Year

Arizona state marijuana tax revenue

2021

$217,553,000

How does Arizona tax marijuana?

Arizona imposes ii taxes on marijuana:

  • A 16% excise revenue enhancement
  • A transaction privilege tax

How does Arizona spend marijuana tax revenue?

Excise taxation revenues are dedicated to:

  • Community colleges
  • Municipal law
  • Fire districts
  • The Highway User Fund
  • The Justice Reinvestment Fund
  • The Attorney General

California's marijuana tax revenue

California legalized marijuana in 2016 under Proffer 64, a ballot initiative. The first retail sales in the state began in January of 2018 and in November of that twelvemonth, medical marijuana was exempted from the state sales tax. The Section of Cannabis Control was vested with responsibility for taxation and licensing.

Year

California state marijuana tax acquirement

2018

$397,720,611

2019

$638,081,178

2020

$ane,031,879,926

2021

$1,294,632,799

How does California tax marijuana?

California taxes are as follows: $ix.65 per ounce for bloom, $2.87 per ounce for leaves, and $1.35 per ounce for fresh plant.

How does California spend marijuana revenue enhancement revenue?

  • Starting time, the revenue covers regulatory and research costs.
  • Then, threescore% goes to anti-drug programs targeting kids;
  • 20% goes to environmental programs; and
  • twenty% goes to public safety.

Colorado's marijuana tax acquirement

Yr

Colorado state marijuana tax revenue

2014

$67,594,323

2015

$130,411,173

2016

$193,604,810

2017

$247,368,473

2018

$266,529,637

2019

$302,458,426

2020

$387,480,110

2021

$423,486,053

How does Colorado tax marijuana?

Colorado has a 15% wholesale excise tax on marijuana likewise as a 15% retail excise tax. Recreational marijuana is exempted from general sales tax.

How does Colorado spend marijuana tax revenue?

  • 10% goes to local governments.
  • 90% goes to the state authorities.
  • xv.56% of the state revenue goes to the general fund.
  • 12.59% goes to the state public school fund.
  • 71.85% goes to the marijuana revenue enhancement cash fund.

The cannabis tax revenue from the wholesale revenue enhancement goes to the Building Excellent Schools Today (BEST) fund. The first $forty million is earmarked for amalgam new schools.

Connecticut'south marijuana tax revenue

On June 22, 2021, Governor Lamont signed SB 1201 into law, legalizing cannabis for recreational use. Retail sales will brainstorm by the end of 2022.

The Land Office of Fiscal Analysis anticipates total state and municipal tax revenue volition equal $four.1 million in fiscal year 2022, and volition reach 73.4 million by fiscal twelvemonth 2026.

How will Connecticut taxation marijuana?

Connecticut will impose the following taxes on recreational marijuana:

  • Excise revenue enhancement of 0.625 cents per milligram of THC for cannabis flower
  • Excise tax of 0.nine cents per milligram for other products
  • 2.75 cents per milligram for edibles
  • 6.35% retail sales tax
  • 3% municipal sales tax

How will Connecticut spend marijuana revenue enhancement revenue?

During the first two fiscal years, revenue generated from Cannabis sales will be used to support administrative costs. In subsequent years:

  • fifteen% will go to the general fund
  • 60% of the remaining acquirement will go towards social disinterestedness programs
  • 25% of the remaining revenue will go towards substance misuse treatment programs

Illinois's marijuana tax revenue

Recreational cannabis apply was approved in Illinois in May of 2019 when the Cannabis Regulation and Tax Act passed under House Bill 1438. The Governor signed the legislation into law in June of the same year, and retail sales began January one, 2020.

Year

Illinois country marijuana tax revenue

2020

$52,783,471

2021

$317,074,561

How does Illinois revenue enhancement marijuana?

Illinois charges 7% of cannabis products' value in wholesale taxes. It also levies the following retail taxes:

  • 10% of value for cannabis products with 35% THC or less,
  • 25% of value for cannabis products with more than 35% THC, and
  • 20% of value for infused cannabis products that tin't be smoked.

Full general sales tax also applies.

How does Illinois spend marijuana tax revenue?

  • 35% to the general fund.
  • 25% to the Illinois Recover, Reinvest and Renew Program.
  • 20% to mental health and substance abuse.
  • 10% to pay land bills.
  • viii% to local regime.
  • ii% to public education.

Maine's marijuana tax revenue

Maine legalized marijuana in 2016 under a ballot initiative, Ballot Question 1. In response, the Legislature passed LD 1719, an Act to Implement a Regulatory Structure for Adult Use Marijuana. The Legislature overrode the governor's veto of the beak and retail sales began on Oct 9, 2020.

Year

Maine state marijuana tax revenue

2018

$ 2,444,917.74 (medical but)

2019

$ two,597,338.25 (medical only)

2020

$4,911,000 (medical and recreational)

The State of Maine operates on a financial twelvemonth that runs from July i through June 30. Accordingly, revenue and expense data from land financial year 2020 covers the flow from July 1, 2019 through the determination of the fiscal yr on June 30, 2020.

How does Maine tax marijuana?

Hither'south how Maine taxes marijuana cultivators:

  • $335 per pound of bloom.
  • $94 per pound of trim.
  • $1.50 per seedling or young plant.
  • $0.30 per seed.

Consumers volition also pay a x% sales tax.

How does Maine spend marijuana tax revenue?

  • 12% to Developed Use Marijuana Public Health and Rubber Fund.
  • 88% to the general fund.

Massachusetts's marijuana tax revenue

Recreational marijuana use was approved in 2016 nether Ballot Question 4. While retail sales were originally set up to begin in January of 2018, this was delayed until July ane, 2018 nether Legislation H 3818. The country's first retail store opened in November of 2018.

Year

Massachusetts state marijuana tax revenue

2019

$22,058,544

2020

$81,734,083

2021

$176,731,045.43

How does Massachusetts taxation marijuana?

In Massachusetts, retail cannabis customers pay a retail excise tax of 10% plus a general sales tax of six.25%.

How does Massachusetts spend marijuana tax acquirement?

Sales revenue enhancement acquirement goes to the general fund, the Massachusetts Bay Transportation Authority, and the Schoolhouse Building Dominance.

The excise revenue enhancement support programs similar the Alcoholism Administration and the Cannabis Command Committee.

Montana's marijuana taxation revenue

Marijuana was legalized in a 2020 ballot initiative, Montana I-190. Nether the Marijuana Legalization and Tax Initiative, retail sales began in 2022.

In January of 2022, an estimated $22.6 meg in marijuana sales were fabricated and generated $two.96 million in tax revenue.

How does Montana revenue enhancement marijuana?

Montana has divide tax structures for recreational and medical marijuana. The following taxes apply:

  • 20% adult employ recreational sales tax
  • 4% medical apply sales tax

How does Montana spend marijuana tax revenue?

Montana's marijuana tax acquirement is distributed every bit follows:

  • $six,000,000 to the Centre plan
  • 20% of remaining revenue to Fish, Wildlife and Parks
  • $200,000 to veterans and surviving spouses
  • $150,000 to crisis treatment and training
  • Residual to general fund

Michigan'southward marijuana tax revenue

Michigan legalized recreational marijuana in 2018 and its first dispensaries opened in December of 2019.

Year

Michigan land marijuana tax revenue

2020

$45,700,000

2021

$246,657,520

How does Michigan taxation marijuana?

Consumers currently pay a 10% excise revenue enhancement and 6% sales taxation. The excise taxation applies just to recreational, not medical marijuana.

How does Michigan spend marijuana tax revenue?

In the kickoff two years of legalization, $xx million in revenue will go to medical marijuana enquiry. The balance volition be split betwixt cities, townships, villages, counties, the land'due south School Aid Fund, and the Michigan Transportation Fund.

Nevada'south marijuana revenue enhancement acquirement

Recreational marijuana sales were approved in 2016 nether Ballot Question ii. The ballot initiative indicated retail sales were to start in January of 2017, the Department of Taxation pushed the showtime date dorsum to July 1, 2017.

Twelvemonth

Nevada state marijuana tax acquirement

2018

$69,759,783

2019

$99,184,973

2020

$105,180,947

2021

$157,751,743

How does Nevada taxation marijuana?

Nevada taxes weed at the retail (ten% of purchase) and wholesale (fifteen% of off-white market value) levels. There is also a half dozen.85% sales tax equally well every bit local taxes charged in some municipalities.

How does Nevada spend marijuana tax revenue?

Income from the retail tax goes to the state's rainy mean solar day fund. Acquirement from the wholesale tax goes to cover expenses and boost the rainy fund too.

New United mexican states'south marijuana revenue enhancement revenue

In March of 2021, the New Mexico legislature passed the Cannabis Regulation Act to let commercial production and sales to residents 21 and over. Commercial sales are expected to brainstorm on April 1, 2022.

The Legislative Finance Commission estimates that the commencement fiscal year of recreational marijuana sales would produce approximately $19.i million in net land tax acquirement and an additional $9.4 million in revenue for local governments. The state taxation acquirement is expected to increase to $thirty.1 million in fiscal year 2023 to 2024.

How will New Mexico tax marijuana?

New United mexican states will impose several taxes on recreational cannabis including the following:

  • A 12% excise revenue enhancement, which volition increase to 18% by 2030
  • A gross receipts tax, which varies by county

The tax on medical marijuana was dropped considering of the imposition of the taxation on legalized recreational marijuana.

How will New Mexico spend marijuana revenue enhancement revenue?

New Mexico volition distribute the proceeds from the excise tax to municipalities and counties.

New York's marijuana revenue enhancement revenue

Recreational marijuana sales were legalized in New York by S. 854, which was signed into law by Governor Andrew Cuomo in March 2021. Retail sales are expected to begin on April 1, 2022.

The first year of retail sales is expected to produce $xx million in revenue enhancement acquirement and fees, which is projected to grow to $115 million in 2022 to 2023; $158 1000000 in 2023 to 2024; and $245 million in 2024 to 2025.

How will New York tax marijuana?

New York will impose the following taxes on marijuana sales:

  • 0.5 cent/milligram of THC in blossom
  • 0.8 cent/milligram of THC in concentrate
  • 0.3 cent/milligram of THC in edibles
  • nine% retail tax
  • iv% state local tax

How will New York spend marijuana tax revenue?

New York is expecting to employ the tax revenue from marijuana sales to offset the decline in revenue resulting from a reduction in taxable cigarette consumption.

Oregon's marijuana taxation acquirement

Oregon legalized recreational marijuana in 2014 when voters canonical Initiative Measure out 91. In 2015, the legislature approved a bill allowing retail sales to start October ane, 2015. Sales were initially managed through medical dispensaries and the state began granting recreational licenses in Oct of 2016.

Yr

Oregon country marijuana tax revenue

2016

$20,652,983

2017

$lxx,263,897

2018

$82,203,729

2019

$102,094,948

2020

$133,150,349

2021

$178,262,488

How does Oregon tax marijuana?

Oregon retailers accuse a 17% country retail tax on marijuana products.

How does Oregon spend marijuana tax revenue?

  • 40% to the state school fund.
  • twenty% to mental health, alcoholism, and drug services.
  • 15% to the Oregon country constabulary.
  • v% to the Oregon Wellness Authorisation for drug treatment and prevention.
  • xx% to cities and counties.

Vermont's marijuana tax revenue

Vermont legalized the possession of recreational marijuana in 2018, though taxes take only more recently been passed. Retail sales operations are expected to begin on October 1, 2022.

How volition Vermont tax marijuana?

The state of Vermont imposes a 14% excise tax on marijuana at the point of sale. There's as well a six% general sales tax.

A enquiry written report published by the RAND Corporation suggests that aggressive taxation could produce betwixt $20 and $75 million in annual revenue for the state.

How will Vermont spend marijuana tax revenue?

Bill S.54 states that "revenue from the sales and use tax imposed . . . on retail sales of cannabis or cannabis products in this State shall be used to fund a grant program to start or aggrandize afterschool and summer learning programs, with a focus on increasing admission in underserved areas of the Country."

Washington's marijuana tax revenue

Sales of marijuana were legalized in 2012 after voters approved Measure Initiative 502. The State Liquor Control Board was vested with responsibility for regulating and taxing cannabis sales. Retail sales outset began in July of 2014 and medical dispensaries have been required to have a retail license since June of 2016.

Year

Washington land marijuana tax revenue

2015

$64,630,000

2016

$186,000,000

2017

$315,200,000

2018

$362,000,000

2019

$390,400,000

2020

$469,159,137

2021

$559,493,474

How does Washington tax marijuana?

Washington charges a 37% retail tax on marijuana likewise as a 6.5% retail sales tax. Medical cannabis is exempt from sales revenue enhancement.

How does Washington spend marijuana tax acquirement?

Information technology goes to a variety of places. Here are a few of the places that money went in 2020:

  • The country health authority for a healthy youth survey.
  • The Academy of Washington for marijuana-related educational programs.
  • The state's health professions business relationship.
  • Various state departments for inquiry related to pesticides, licensing, accreditation, and testing.

The status of marijuana legalization around the Us

All of this tax revenue may play a part in legalization discussions. But some states haven't been swayed. Here are united states of america where cannabis is legal, illegal, criminalized, or somewhere in the middle:

Land

Marijuana Legalization Status

Alabama

Medical only

Alaska

Recreational legalized

Arizona

Recreational legalized

Arkansas

Medical merely

California

Recreational legalized

Colorado

Recreational legalized

Connecticut

Recreational legalized

Delaware

Medical only

Commune of Columbia

Recreational legalized

Florida

Medical only

Georgia

Medical CBD oil but

Hawaii

Medical only

Idaho

Illegal

Illinois

Recreational legalized

Indiana

Medical CBD oil only

Iowa

Medical CBD oil only

Kansas

Illegal

Kentucky

Medical CBD oil but

Louisiana

Medical merely

Maine

Recreational legalized

Maryland

Medical only

Massachusetts

Recreational legalized

Michigan

Recreational legalized

Minnesota

Medical simply

Mississippi

Medical only

Missouri

Medical only

Montana

Recreational legalized

Nebraska

Illegal

Nevada

Recreational legalized

New Hampshire

Medical simply

New Bailiwick of jersey

Recreational legalized

New Mexico

Recreational legalized

New York

Recreational legalized

Due north Carolina

Illegal

Due north Dakota

Medical merely

Ohio

Medical only

Oklahoma

Medical only

Oregon

Recreational legalized

Pennsylvania

Medical only

Rhode Island

Medical only

S Carolina

Illegal

South Dakota

Medical only

Tennessee

Medical CBD oil but

Texas

Medical CBD oil only

Utah

Medical only

Vermont

Recreational legalized

Virginia

Recreational legalized

Washington

Recreational legalized

Westward Virginia

Medical only

Wisconsin

Medical CBD oil only

Wyoming

Illegal

Sources

  • Alaska Department of Revenue (2022). "Marijuana Tax Almanac Study Data."
  • Boesen, Ulrik (2021). Taxation Foundation. "Several States Considering Legal Recreational Marijuana."
  • California Department of Revenue enhancement and Fee Administration (2022). "Cannabis Tax Revenues."
  • Colorado Department of Acquirement (2022). "Marijuana Taxation Reports."
  • DISA Global Solutions (2022). "Map of Marijuana Legality past State."
  • Federation of Tax Administrators (2022). "Status of State Taxation/Sales of Marijuana."
  • Fernandez, Cynthia (2022). Grown In. "Michigan's cannabis tax revenue blew upwardly in 2021."
  • Illinois Department of Revenue (2022). "Almanac Report Fiscal Year 2021."
  • Maine Department of Authoritative and Financial Services (2022). "Adult Use Marijuana Program."
  • Marijuana Policy Project (2022). "Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use."
  • Office on the Comptroller, Commonwealth of Massachusetts (2022). "Full Tax Revenue Collections."
  • Oregon Section of Revenue (2022). "Oregon marijuana revenue enhancement statistics."
  • State of Nevada Department of Taxation (2022). "Annual Report Financial Yr 2021."
  • Washington State Liquor and Cannabis Board (2022). "Annual Report Fiscal Yr 2021."