What Does The Government Spend Weed Tax Money On
Marijuana Taxation Acquirement: A State-by-State Breakdown
Marijuana can bring in big bucks for state governments.
In 2014, Colorado and Washington became the first states to allow the sale of cannabis products. Less than a decade later, a majority of states at present allow the distribution of medical and/or recreational marijuana, or accept ballot initiatives in place that would do so.
The map beneath from the Federation of Taxation Administrators shows the status of marijuana laws across the United States.
Legalization of cannabis products has been a boon for state budgets, with states reporting a combined total of $x.four billion in tax revenue from cannabis sales as of the close of 2021, non including any acquirement produced by medical marijuana distribution. Local towns and cities with thriving marijuana operations have as well generated millions.
Hither are the statistics on how much states make from marijuana taxes, how they tax cannabis, and what they utilise that coin for.
Marijuana taxation revenue by state 2021
The table beneath shows the acquirement collected in states with operational marijuana programs in 2021. Full tax nerveless varies depending on state population, how long the program has been established, and the method of taxation.
Land | 2021 marijuana revenue enhancement acquirement |
---|---|
Alaska | $xxx,054,250 |
Arizona | $219,413,828 |
California | $i,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 merely accept a less-than-fully operational market. In 2021, the Taxation Foundation has estimated excise tax revenue for states with a market that has been operational for at to the lowest degree three years. Here's how much these states may stand up to make once their markets are fully established:
Country | Estimated annual marijuana excise revenue enhancement acquirement from fully operational market |
---|---|
District of Columbia | $26,605,996 |
Montana | $35,142,502 |
New Jersey | $158,974,353 |
Vermont | $27,313,974 |
Of grade, these states aren't likely to run into these numbers in excise taxation revenue until at least three years later they institute a market. Seeing numbers in the $ii–$10 meg range is more than likely in early on years.
But 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 tax figures and the number of marijuana-using residents in each state, the Tax Foundation estimated the potential excise tax revenue with a market established for at least three years.
Here'due south what they establish:
State | Potential Marijuana Revenue enhancement 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 | $50,183,462 |
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 |
N Carolina | $182,947,622 |
North Dakota | $thirteen,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 |
Medical marijuana tax collection
Non all states intermission down their revenue reports by medical versus recreational marijuana, just the table below shows the sources of tax acquirement by type of cannabis utilise when data is bachelor.
State | Revenue from Medical Marijuana | Revenue from Adult Employ Recreational Marijuana |
---|---|---|
Arizona | $50,002,000 | $63,413,000 |
Maine | $3,969,914.00 | $941,048 for recreational |
Nevada | $147 | $157,752,000 |
Total tax collections by land
Colorado and Washington were leaders in the recreational marijuana move, interim as early every bit 2012 to move toward legalization. As a result, it comes as no surprise that they've generated more revenue from marijuana taxes than other states, some of which have had an operational market for two years or less.
Withal, the tables below evidence the tremendous potential for states to generate meaning acquirement over time. In fact, the Revenue enhancement Foundation estimates the market for legal marijuana could be worth as much as $thirty billion by 2023.
With states facing budget shortfalls resulting from COVID-19, acquirement from recreational marijuana could exist a much-needed lifeline in locations that pursue legalization or facilitate the expansion of current markets.
State | First year of revenue enhancement drove | Total revenue collected (every bit of end of 2021) |
---|---|---|
Alaska | 2017 | $85,901,000 |
Arizona | 2021 | $217,553,000 |
California | 2018 | $three,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 | $ii,346,930,000 |
Now permit'due south take a look at how cannabis revenue enhancement revenue has grown over the years for each country -- as well every bit how those states are using that money.
Alaska'due south marijuana tax revenue
Alaska canonical the legalization of marijuana in 2014 under Ballot Measure 2. Retail sales began in October of 2016. The Marijuana Control Lath was tasked with both licensing and tracking cannabis operations statewide.
Year | Alaska country marijuana tax revenue |
---|---|
2017 | $i,749,497 |
2018 | $10,801,357 |
2019 | $xix,082,542 |
2020 | $24,213,296 |
2021 | $30,054,250 |
How does Alaska taxation 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 revenue enhancement revenue?
- 25% to the general fund.
- fifty% to the Department of Public Safety, Health and Social Services, and Department of Corrections.
- 25% to the Marijuana Education Fund.
Arizona's marijuana tax revenue
Arizona voters approved Proposition 216, the Marijuana Legalization Initiative, in 2020. This ballot initiative legalized recreational marijuana nether the purview of the Arizona Department of Health and Human being Services. DHS began to license retail establishments on January 16, 2021.
In its first year of operations, Arizona collected more than $217 one thousand thousand in tax acquirement from both adult use sales, medical use sales, and excise taxes.
Year | Arizona land marijuana tax revenue |
---|---|
2021 | $217,553,000 |
How does Arizona tax marijuana?
Arizona imposes two taxes on marijuana:
- A 16% excise revenue enhancement
- A transaction privilege tax
How does Arizona spend marijuana revenue enhancement acquirement?
Excise tax revenues are dedicated to:
- Customs colleges
- Municipal law
- Burn down districts
- The Highway User Fund
- The Justice Reinvestment Fund
- The Attorney Full general
California's marijuana taxation acquirement
California legalized marijuana in 2016 under Proposition 64, a election initiative. The starting time retail sales in the state began in January of 2018 and in Nov of that twelvemonth, medical marijuana was exempted from the state sales revenue enhancement. The Department of Cannabis Command was vested with responsibleness for taxation and licensing.
Year | California state marijuana tax revenue |
---|---|
2018 | $397,720,611 |
2019 | $638,081,178 |
2020 | $1,031,879,926 |
2021 | $one,294,632,799 |
How does California tax marijuana?
California taxes are as follows: $ix.65 per ounce for flower, $2.87 per ounce for leaves, and $one.35 per ounce for fresh plant.
How does California spend marijuana tax revenue?
- First, the revenue covers regulatory and research costs.
- So, 60% goes to anti-drug programs targeting kids;
- twenty% goes to environmental programs; and
- 20% goes to public safety.
Colorado's marijuana tax acquirement
Twelvemonth | Colorado land 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 equally well as a 15% retail excise tax. Recreational marijuana is exempted from general sales tax.
How does Colorado spend marijuana tax acquirement?
- x% goes to local governments.
- ninety% goes to the state government.
- 15.56% of the state acquirement goes to the general fund.
- 12.59% goes to the state public schoolhouse fund.
- 71.85% goes to the marijuana taxation cash fund.
The cannabis tax revenue from the wholesale tax goes to the Building Excellent Schools Today (Best) fund. The get-go $40 million is earmarked for constructing new schools.
Connecticut's marijuana tax acquirement
On June 22, 2021, Governor Lamont signed SB 1201 into law, legalizing cannabis for recreational use. Retail sales will brainstorm past the stop of 2022.
The State Office of Fiscal Assay anticipates total state and municipal taxation revenue will equal $4.1 1000000 in fiscal yr 2022, and will reach 73.4 million by financial year 2026.
How will Connecticut tax marijuana?
Connecticut will impose the following taxes on recreational marijuana:
- Excise tax of 0.625 cents per milligram of THC for cannabis flower
- Excise revenue enhancement of 0.ix 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 offset ii fiscal years, revenue generated from Cannabis sales volition be used to support administrative costs. In subsequent years:
- 15% will go to the general fund
- threescore% of the remaining acquirement volition get towards social equity programs
- 25% of the remaining revenue volition go towards substance misuse treatment programs
Illinois'southward marijuana revenue enhancement revenue
Recreational cannabis use was canonical in Illinois in May of 2019 when the Cannabis Regulation and Revenue enhancement Act passed under Business firm Neb 1438. The Governor signed the legislation into police in June of the same year, and retail sales began January 1, 2020.
Year | Illinois state marijuana taxation revenue |
---|---|
2020 | $52,783,471 |
2021 | $317,074,561 |
How does Illinois tax marijuana?
Illinois charges 7% of cannabis products' value in wholesale taxes. It too 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 can't be smoked.
General sales revenue enhancement also applies.
How does Illinois spend marijuana tax revenue?
- 35% to the full general fund.
- 25% to the Illinois Recover, Reinvest and Renew Program.
- 20% to mental health and substance corruption.
- ten% to pay state bills.
- eight% to local government.
- 2% to public education.
Maine'southward marijuana revenue enhancement revenue
Maine legalized marijuana in 2016 under a ballot initiative, Ballot Question one. In response, the Legislature passed LD 1719, an Human activity to Implement a Regulatory Structure for Adult Utilize Marijuana. The Legislature overrode the governor's veto of the bill and retail sales began on Oct ix, 2020.
Year | Maine country marijuana tax revenue |
---|---|
2018 | $ 2,444,917.74 (medical only) |
2019 | $ two,597,338.25 (medical only) |
2020 | $four,911,000 (medical and recreational) |
The Land of Maine operates on a fiscal twelvemonth that runs from July i through June 30. Accordingly, acquirement and expense information from land fiscal yr 2020 covers the period from July i, 2019 through the conclusion of the fiscal year on June 30, 2020.
How does Maine tax marijuana?
Hither'due south how Maine taxes marijuana cultivators:
- $335 per pound of bloom.
- $94 per pound of trim.
- $1.50 per seedling or immature constitute.
- $0.thirty per seed.
Consumers volition likewise pay a 10% sales tax.
How does Maine spend marijuana tax acquirement?
- 12% to Adult Use Marijuana Public Health and Safety Fund.
- 88% to the general fund.
Massachusetts'south marijuana tax revenue
Recreational marijuana use was approved in 2016 under Ballot Question iv. While retail sales were originally set to brainstorm in Jan of 2018, this was delayed until July 1, 2018 under Legislation H 3818. The state's first retail store opened in Nov of 2018.
Year | Massachusetts state marijuana revenue enhancement revenue |
---|---|
2019 | $22,058,544 |
2020 | $81,734,083 |
2021 | $176,731,045.43 |
How does Massachusetts tax marijuana?
In Massachusetts, retail cannabis customers pay a retail excise tax of ten% plus a general sales revenue enhancement of half dozen.25%.
How does Massachusetts spend marijuana taxation revenue?
Sales taxation revenue goes to the full general fund, the Massachusetts Bay Transportation Authority, and the School Edifice Authority.
The excise tax support programs like the Alcoholism Assistants and the Cannabis Control Commission.
Montana's marijuana tax 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 million in marijuana sales were fabricated and generated $ii.96 million in revenue enhancement revenue.
How does Montana tax marijuana?
Montana has dissever tax structures for recreational and medical marijuana. The post-obit taxes utilize:
- 20% adult use recreational sales tax
- four% medical use sales tax
How does Montana spend marijuana tax revenue?
Montana'southward marijuana tax revenue is distributed as follows:
- $6,000,000 to the Eye program
- xx% of remaining revenue to Fish, Wild fauna and Parks
- $200,000 to veterans and surviving spouses
- $150,000 to crisis handling and grooming
- Remainder to general fund
Michigan's marijuana taxation revenue
Michigan legalized recreational marijuana in 2018 and its first dispensaries opened in December of 2019.
Year | Michigan state marijuana tax acquirement |
---|---|
2020 | $45,700,000 |
2021 | $246,657,520 |
How does Michigan tax marijuana?
Consumers currently pay a 10% excise tax and 6% sales tax. The excise tax applies simply to recreational, non medical marijuana.
How does Michigan spend marijuana tax acquirement?
In the offset two years of legalization, $xx meg in acquirement will get to medical marijuana research. The residuum volition be separate between cities, townships, villages, counties, the state's School Aid Fund, and the Michigan Transportation Fund.
Nevada's marijuana tax revenue
Recreational marijuana sales were approved in 2016 under Election Question two. The ballot initiative indicated retail sales were to start in Jan of 2017, the Department of Taxation pushed the start date dorsum to July 1, 2017.
Year | Nevada country marijuana taxation revenue |
---|---|
2018 | $69,759,783 |
2019 | $99,184,973 |
2020 | $105,180,947 |
2021 | $157,751,743 |
How does Nevada revenue enhancement marijuana?
Nevada taxes weed at the retail (10% of purchase) and wholesale (15% of fair marketplace value) levels. There is besides a half dozen.85% sales tax equally well as 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 embrace expenses and boost the rainy fund as well.
New United mexican states's marijuana tax revenue
In March of 2021, the New United mexican states legislature passed the Cannabis Regulation Act to permit commercial production and sales to residents 21 and over. Commercial sales are expected to begin on Apr one, 2022.
The Legislative Finance Commission estimates that the first fiscal year of recreational marijuana sales would produce approximately $19.ane million in internet state tax revenue and an additional $nine.4 million in acquirement for local governments. The land tax revenue is expected to increase to $30.1 million in fiscal year 2023 to 2024.
How will New Mexico revenue enhancement marijuana?
New Mexico volition impose several taxes on recreational cannabis including the following:
- A 12% excise tax, which will increase to 18% by 2030
- A gross receipts tax, which varies past county
The tax on medical marijuana was dropped because of the imposition of the tax on legalized recreational marijuana.
How will New United mexican states spend marijuana tax acquirement?
New Mexico will distribute the proceeds from the excise tax to municipalities and counties.
New York's marijuana tax acquirement
Recreational marijuana sales were legalized in New York past S. 854, which was signed into police 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 $20 1000000 in revenue enhancement revenue and fees, which is projected to grow to $115 million in 2022 to 2023; $158 million in 2023 to 2024; and $245 meg in 2024 to 2025.
How will New York tax marijuana?
New York volition impose the post-obit taxes on marijuana sales:
- 0.5 cent/milligram of THC in blossom
- 0.eight cent/milligram of THC in concentrate
- 0.three cent/milligram of THC in edibles
- nine% retail tax
- 4% state local taxation
How will New York spend marijuana taxation revenue?
New York is expecting to use the tax revenue from marijuana sales to get-go the decline in revenue resulting from a reduction in taxable cigarette consumption.
Oregon's marijuana tax revenue
Oregon legalized recreational marijuana in 2014 when voters approved Initiative Measure 91. In 2015, the legislature approved a bill allowing retail sales to beginning October 1, 2015. Sales were initially managed through medical dispensaries and the state began granting recreational licenses in October of 2016.
Year | Oregon country marijuana taxation revenue |
---|---|
2016 | $twenty,652,983 |
2017 | $seventy,263,897 |
2018 | $82,203,729 |
2019 | $102,094,948 |
2020 | $133,150,349 |
2021 | $178,262,488 |
How does Oregon revenue enhancement marijuana?
Oregon retailers charge 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 state police.
- 5% to the Oregon Health Authority for drug treatment and prevention.
- xx% to cities and counties.
Vermont'south marijuana tax revenue
Vermont legalized the possession of recreational marijuana in 2018, though taxes have only more recently been passed. Retail sales operations are expected to begin on October one, 2022.
How will Vermont tax marijuana?
The state of Vermont imposes a 14% excise taxation on marijuana at the indicate of sale. There's also a six% general sales taxation.
A research report published past 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 taxation revenue?
Bill Southward.54 states that "revenue from the sales and apply revenue enhancement imposed . . . on retail sales of cannabis or cannabis products in this Country shall be used to fund a grant program to starting time or expand afterschool and summer learning programs, with a focus on increasing access in underserved areas of the Country."
Washington's marijuana taxation revenue
Sales of marijuana were legalized in 2012 after voters approved Measure out Initiative 502. The Country Liquor Control Board was vested with responsibility for regulating and taxing cannabis sales. Retail sales first began in July of 2014 and medical dispensaries have been required to have a retail license since June of 2016.
Year | Washington state 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 revenue enhancement marijuana?
Washington charges a 37% retail taxation on marijuana as well as a half dozen.5% retail sales tax. Medical cannabis is exempt from sales revenue enhancement.
How does Washington spend marijuana tax acquirement?
It goes to a multifariousness of places. Here are a few of the places that money went in 2020:
- The state wellness authority for a healthy youth survey.
- The University of Washington for marijuana-related educational programs.
- The country'southward health professions account.
- Various land departments for research related to pesticides, licensing, accreditation, and testing.
The status of marijuana legalization around the United States
All of this tax revenue may play a part in legalization discussions. Simply some states haven't been swayed. Here are the states where cannabis is legal, illegal, criminalized, or somewhere in the eye:
Country | Marijuana Legalization Condition |
---|---|
Alabama | Medical only |
Alaska | Recreational legalized |
Arizona | Recreational legalized |
Arkansas | Medical only |
California | Recreational legalized |
Colorado | Recreational legalized |
Connecticut | Recreational legalized |
Delaware | Medical only |
District of Columbia | Recreational legalized |
Florida | Medical but |
Georgia | Medical CBD oil only |
Hawaii | Medical only |
Idaho | Illegal |
Illinois | Recreational legalized |
Indiana | Medical CBD oil just |
Iowa | Medical CBD oil simply |
Kansas | Illegal |
Kentucky | Medical CBD oil only |
Louisiana | Medical only |
Maine | Recreational legalized |
Maryland | Medical simply |
Massachusetts | Recreational legalized |
Michigan | Recreational legalized |
Minnesota | Medical only |
Mississippi | Medical only |
Missouri | Medical but |
Montana | Recreational legalized |
Nebraska | Illegal |
Nevada | Recreational legalized |
New Hampshire | Medical just |
New Bailiwick of jersey | Recreational legalized |
New Mexico | Recreational legalized |
New York | Recreational legalized |
North Carolina | Illegal |
North Dakota | Medical simply |
Ohio | Medical only |
Oklahoma | Medical merely |
Oregon | Recreational legalized |
Pennsylvania | Medical but |
Rhode Island | Medical only |
South Carolina | Illegal |
South Dakota | Medical only |
Tennessee | Medical CBD oil but |
Texas | Medical CBD oil simply |
Utah | Medical only |
Vermont | Recreational legalized |
Virginia | Recreational legalized |
Washington | Recreational legalized |
Due west Virginia | Medical simply |
Wisconsin | Medical CBD oil but |
Wyoming | Illegal |
Sources
- Alaska Section of Revenue (2022). "Marijuana Taxation Annual Report Data."
- Boesen, Ulrik (2021). Taxation Foundation. "Several States Considering Legal Recreational Marijuana."
- California Department of Tax and Fee Administration (2022). "Cannabis Revenue enhancement Revenues."
- Colorado Department of Acquirement (2022). "Marijuana Tax Reports."
- DISA Global Solutions (2022). "Map of Marijuana Legality past Land."
- Federation of Taxation Administrators (2022). "Status of State Taxation/Sales of Marijuana."
- Fernandez, Cynthia (2022). Grown In. "Michigan'south cannabis tax revenue blew upwards in 2021."
- Illinois Department of Revenue (2022). "Annual Report Fiscal Twelvemonth 2021."
- Maine Department of Administrative and Financial Services (2022). "Adult Use Marijuana Plan."
- Marijuana Policy Project (2022). "Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use."
- Office on the Comptroller, Commonwealth of Massachusetts (2022). "Total Tax Acquirement Collections."
- Oregon Department of Revenue (2022). "Oregon marijuana tax statistics."
- Country of Nevada Section of Tax (2022). "Annual Report Fiscal Year 2021."
- Washington State Liquor and Cannabis Board (2022). "Annual Written report Fiscal Twelvemonth 2021."
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