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.

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 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

Data source: Tax Foundation (2021).

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

Data source: Tax Foundation (2021).

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."