In 2014, Colorado and Washington became the first states to let the sale of cannabis products. Less than a decade later, a bulk of states now allow the distribution of medical and/or recreational marijuana, or have election initiatives in identify that would practice and so.

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

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 $10.four billion in taxation acquirement from cannabis sales equally of the close of 2021, not including any revenue produced by 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 tax cannabis, and what they use that money for.

Marijuana tax revenue by state 2021

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

State

2021 marijuana revenue enhancement acquirement

Alaska

$30,054,250

Arizona

$219,413,828

California

$one,294,632,799

Colorado

$423,486,053

Illinois

$317,074,562

Maine

$iv,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 simply accept a less-than-fully operational market place. In 2021, the Revenue enhancement Foundation has estimated excise tax acquirement for states with a marketplace that has been operational for at least three years. Here'southward how much these states may stand to make once their markets are fully established:

Country

Estimated annual marijuana excise tax acquirement from fully operational marketplace

District of Columbia

$26,605,996

Montana

$35,142,502

New Jersey

$158,974,353

Vermont

$27,313,974

Information source: Tax Foundation (2021).

Of course, these states aren't likely to see these numbers in excise tax acquirement until at least three years later on they institute a market. Seeing numbers in the $two–$10 1000000 range is more likely in early 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 to the lowest degree three years.

Hither's what they plant:

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

North Carolina

$182,947,622

Due north Dakota

$13,231,599

Ohio

$220,827,478

Oklahoma

$67,680,000

Pennsylvania

$244,553,615

Rhode Island

$35,455,500

Due 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

$x,054,045

Data source: Tax Foundation (2021).

Medical marijuana taxation collection

Not all states interruption down their revenue reports past medical versus recreational marijuana, but the table below shows the sources of tax revenue by type of cannabis use when information is available.

Land

Acquirement from Medical Marijuana

Revenue from Adult 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 tax collections past state

Colorado and Washington were leaders in the recreational marijuana movement, acting as early as 2012 to motility toward legalization. As a result, it comes equally no surprise that they've generated more acquirement from marijuana taxes than other states, some of which have had an operational marketplace for ii years or less.

Still, the tables below show the tremendous potential for states to generate significant acquirement over fourth dimension. In fact, the Tax Foundation estimates the marketplace for legal marijuana could be worth as much as $thirty billion by 2023.

With states facing budget shortfalls resulting from COVID-19, revenue from recreational marijuana could exist a much-needed lifeline in locations that pursue legalization or facilitate the expansion of electric current markets.

State

Get-go year of tax collection

Total acquirement nerveless (every bit of end of 2021)

Alaska

2017

$85,901,000

Arizona

2021

$217,553,000

California

2018

$3,362,314,514

Colorado

2014

$ii,018,933,005

Illinois

2020

$369,858,000

Maine

2018

$9,953,000

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 allow'due south have a look at how cannabis revenue enhancement revenue has grown over the years for each land -- likewise as how those states are using that money.

Alaska's marijuana taxation acquirement

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

Year

Alaska state marijuana tax revenue

2017

$ane,749,497

2018

$10,801,357

2019

$19,082,542

2020

$24,213,296

2021

$30,054,250

How does Alaska tax marijuana?

Alaska taxes cultivators per ounce and blazon: $fifty per ounce for mature flowers, $25 per ounce for immature flowers, and $i for each clone.

How does Alaska spend marijuana taxation revenue?

  • 25% to the full general fund.
  • 50% to the Department of Public Rubber, Wellness and Social Services, and Department of Corrections.
  • 25% to the Marijuana Education Fund.

Arizona'southward marijuana revenue enhancement revenue

Arizona voters approved Proposition 216, the Marijuana Legalization Initiative, in 2020. This election initiative legalized recreational marijuana under the purview of the Arizona Department of Wellness and Man Services. DHS began to license retail establishments on Jan xvi, 2021.

In its beginning yr of operations, Arizona nerveless more than $217 meg in taxation revenue from both adult utilise sales, medical use sales, and excise taxes.

Yr

Arizona state marijuana revenue enhancement revenue

2021

$217,553,000

How does Arizona tax marijuana?

Arizona imposes ii taxes on marijuana:

  • A 16% excise tax
  • A transaction privilege tax

How does Arizona spend marijuana tax revenue?

Excise taxation revenues are dedicated to:

  • Customs colleges
  • Municipal police
  • Fire districts
  • The Highway User Fund
  • The Justice Reinvestment Fund
  • The Attorney Full general

California's marijuana taxation revenue

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

Twelvemonth

California state marijuana taxation revenue

2018

$397,720,611

2019

$638,081,178

2020

$1,031,879,926

2021

$1,294,632,799

How does California revenue enhancement marijuana?

California taxes are as follows: $ix.65 per ounce for bloom, $ii.87 per ounce for leaves, and $ane.35 per ounce for fresh plant.

How does California spend marijuana tax revenue?

  • First, the revenue covers regulatory and research costs.
  • Then, lx% goes to anti-drug programs targeting kids;
  • xx% goes to environmental programs; and
  • 20% goes to public safety.

Colorado's marijuana tax revenue

Year

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 taxation marijuana?

Colorado has a xv% wholesale excise tax on marijuana equally well every bit a fifteen% retail excise tax. Recreational marijuana is exempted from full general sales revenue enhancement.

How does Colorado spend marijuana tax revenue?

  • 10% goes to local governments.
  • 90% goes to the state government.
  • fifteen.56% of the country revenue goes to the general fund.
  • 12.59% goes to the state public school fund.
  • 71.85% goes to the marijuana tax cash fund.

The cannabis revenue enhancement acquirement from the wholesale tax goes to the Building Fantabulous Schools Today (BEST) fund. The commencement $40 million is earmarked for constructing new schools.

Connecticut'due south marijuana revenue enhancement revenue

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

The Country Office of Financial Analysis anticipates total state and municipal tax revenue will equal $4.1 one thousand thousand in fiscal twelvemonth 2022, and volition reach 73.4 meg by fiscal year 2026.

How will Connecticut taxation marijuana?

Connecticut will impose the following taxes on recreational marijuana:

  • Excise taxation of 0.625 cents per milligram of THC for cannabis flower
  • Excise tax of 0.nine cents per milligram for other products
  • two.75 cents per milligram for edibles
  • six.35% retail sales revenue enhancement
  • 3% municipal sales tax

How will Connecticut spend marijuana revenue enhancement revenue?

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

  • xv% volition go to the general fund
  • threescore% of the remaining revenue volition go towards social disinterestedness programs
  • 25% of the remaining revenue will go towards substance misuse treatment programs

Illinois's marijuana tax revenue

Recreational cannabis utilise was approved in Illinois in May of 2019 when the Cannabis Regulation and Tax Human activity passed under House Pecker 1438. The Governor signed the legislation into law in June of the aforementioned year, and retail sales began Jan 1, 2020.

Year

Illinois state marijuana revenue enhancement acquirement

2020

$52,783,471

2021

$317,074,561

How does Illinois taxation marijuana?

Illinois charges seven% 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 than 35% THC, and
  • 20% of value for infused cannabis products that tin't be smoked.

General sales tax too 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 corruption.
  • ten% to pay state bills.
  • 8% to local authorities.
  • ii% to public didactics.

Maine'southward marijuana tax revenue

Maine legalized marijuana in 2016 under a ballot initiative, Election Question i. 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 pecker and retail sales began on October 9, 2020.

Year

Maine country marijuana revenue enhancement revenue

2018

$ 2,444,917.74 (medical only)

2019

$ two,597,338.25 (medical only)

2020

$4,911,000 (medical and recreational)

The State of Maine operates on a fiscal year that runs from July i through June thirty. Accordingly, revenue and expense information from state fiscal yr 2020 covers the catamenia from July ane, 2019 through the conclusion of the fiscal year on June thirty, 2020.

How does Maine tax marijuana?

Here's how Maine taxes marijuana cultivators:

  • $335 per pound of flower.
  • $94 per pound of trim.
  • $1.50 per seedling or young found.
  • $0.xxx per seed.

Consumers will also pay a 10% sales tax.

How does Maine spend marijuana tax revenue?

  • 12% to Adult Employ Marijuana Public Health and Safety Fund.
  • 88% to the general fund.

Massachusetts's marijuana tax revenue

Recreational marijuana employ was approved in 2016 under Ballot Question iv. While retail sales were originally set to brainstorm in January of 2018, this was delayed until July 1, 2018 under Legislation H 3818. The state's first retail store opened in November of 2018.

Year

Massachusetts country marijuana tax 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 revenue enhancement of x% plus a general sales tax of vi.25%.

How does Massachusetts spend marijuana tax revenue?

Sales tax revenue goes to the general fund, the Massachusetts Bay Transportation Authority, and the School Building Authority.

The excise tax support programs similar the Alcoholism Administration and the Cannabis Control Commission.

Montana's marijuana tax revenue

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

In January of 2022, an estimated $22.6 1000000 in marijuana sales were made and generated $2.96 million in tax revenue.

How does Montana tax marijuana?

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

  • 20% adult use recreational sales tax
  • 4% medical use sales tax

How does Montana spend marijuana tax acquirement?

Montana'southward marijuana tax acquirement is distributed equally follows:

  • $6,000,000 to the HEART program
  • twenty% of remaining revenue to Fish, Wild animals and Parks
  • $200,000 to veterans and surviving spouses
  • $150,000 to crunch handling and preparation
  • Rest to full general fund

Michigan's marijuana tax revenue

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

Year

Michigan state marijuana tax revenue

2020

$45,700,000

2021

$246,657,520

How does Michigan taxation marijuana?

Consumers currently pay a 10% excise tax and half dozen% sales tax. The excise taxation applies only to recreational, not medical marijuana.

How does Michigan spend marijuana tax revenue?

In the beginning two years of legalization, $20 million in revenue will become to medical marijuana enquiry. The rest will exist split up betwixt cities, townships, villages, counties, the state'south School Help Fund, and the Michigan Transportation Fund.

Nevada's marijuana taxation acquirement

Recreational marijuana sales were approved in 2016 under Election Question 2. The ballot initiative indicated retail sales were to start in January of 2017, the Department of Revenue enhancement pushed the starting time engagement dorsum to July 1, 2017.

Year

Nevada land marijuana tax revenue

2018

$69,759,783

2019

$99,184,973

2020

$105,180,947

2021

$157,751,743

How does Nevada tax marijuana?

Nevada taxes weed at the retail (x% of purchase) and wholesale (15% of fair market place value) levels. At that place is as well a 6.85% sales tax as well as local taxes charged in some municipalities.

How does Nevada spend marijuana taxation revenue?

Income from the retail revenue enhancement goes to the state's rainy day fund. Revenue from the wholesale taxation goes to embrace expenses and boost the rainy fund equally well.

New Mexico'south marijuana revenue enhancement acquirement

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 April ane, 2022.

The Legislative Finance Committee estimates that the first fiscal year of recreational marijuana sales would produce approximately $xix.one million in net country tax acquirement and an additional $9.iv million in revenue for local governments. The land tax revenue is expected to increase to $30.ane 1000000 in financial year 2023 to 2024.

How will New Mexico revenue enhancement marijuana?

New Mexico volition impose several taxes on recreational cannabis including the post-obit:

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

The revenue enhancement on medical marijuana was dropped because of the imposition of the revenue enhancement on legalized recreational marijuana.

How will New Mexico spend marijuana tax 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 police force by Governor Andrew Cuomo in March 2021. Retail sales are expected to brainstorm on April one, 2022.

The commencement year of retail sales is expected to produce $xx meg in tax acquirement and fees, which is projected to grow to $115 million in 2022 to 2023; $158 million in 2023 to 2024; and $245 1000000 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 flower
  • 0.8 cent/milligram of THC in concentrate
  • 0.3 cent/milligram of THC in edibles
  • nine% retail tax
  • iv% country local taxation

How will New York spend marijuana taxation acquirement?

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

Oregon'southward marijuana taxation acquirement

Oregon legalized recreational marijuana in 2014 when voters canonical Initiative Measure 91. In 2015, the legislature approved a neb assuasive retail sales to get-go October one, 2015. Sales were initially managed through medical dispensaries and the country began granting recreational licenses in Oct of 2016.

Year

Oregon state marijuana tax revenue

2016

$20,652,983

2017

$seventy,263,897

2018

$82,203,729

2019

$102,094,948

2020

$133,150,349

2021

$178,262,488

How does Oregon taxation marijuana?

Oregon retailers charge a 17% land retail tax on marijuana products.

How does Oregon spend marijuana taxation revenue?

  • twoscore% to the state school fund.
  • 20% to mental health, alcoholism, and drug services.
  • 15% to the Oregon country police.
  • five% to the Oregon Health Authority for drug treatment and prevention.
  • 20% to cities and counties.

Vermont's marijuana tax revenue

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

How will Vermont taxation marijuana?

The state of Vermont imposes a 14% excise taxation on marijuana at the bespeak of sale. In that location's likewise a half dozen% general sales tax.

A research report published by the RAND Corporation suggests that aggressive tax could produce betwixt $20 and $75 million in almanac revenue for the country.

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 exist used to fund a grant program to commencement or expand afterschool and summer learning programs, with a focus on increasing access in underserved areas of the State."

Washington'south marijuana tax acquirement

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

Yr

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 tax marijuana?

Washington charges a 37% retail taxation on marijuana likewise as a 6.v% retail sales tax. Medical cannabis is exempt from sales tax.

How does Washington spend marijuana tax revenue?

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

  • The country health authority for a good for you youth survey.
  • The University of Washington for marijuana-related educational programs.
  • The country's health professions business relationship.
  • Various land departments for research related to pesticides, licensing, accreditation, and testing.

The status of marijuana legalization around the U.s.a.

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

State

Marijuana Legalization Condition

Alabama

Medical only

Alaska

Recreational legalized

Arizona

Recreational legalized

Arkansas

Medical merely

California

Recreational legalized

Colorado

Recreational legalized

Connecticut

Recreational legalized

Delaware

Medical only

District of Columbia

Recreational legalized

Florida

Medical only

Georgia

Medical CBD oil merely

Hawaii

Medical merely

Idaho

Illegal

Illinois

Recreational legalized

Indiana

Medical CBD oil only

Iowa

Medical CBD oil only

Kansas

Illegal

Kentucky

Medical CBD oil only

Louisiana

Medical only

Maine

Recreational legalized

Maryland

Medical only

Massachusetts

Recreational legalized

Michigan

Recreational legalized

Minnesota

Medical only

Mississippi

Medical only

Missouri

Medical simply

Montana

Recreational legalized

Nebraska

Illegal

Nevada

Recreational legalized

New Hampshire

Medical only

New Jersey

Recreational legalized

New Mexico

Recreational legalized

New York

Recreational legalized

Due north Carolina

Illegal

Northward Dakota

Medical only

Ohio

Medical only

Oklahoma

Medical only

Oregon

Recreational legalized

Pennsylvania

Medical merely

Rhode Isle

Medical only

Due south Carolina

Illegal

Southward Dakota

Medical only

Tennessee

Medical CBD oil simply

Texas

Medical CBD oil only

Utah

Medical only

Vermont

Recreational legalized

Virginia

Recreational legalized

Washington

Recreational legalized

West Virginia

Medical only

Wisconsin

Medical CBD oil only

Wyoming

Illegal

Sources

  • Alaska Section of Revenue (2022). "Marijuana Tax Annual Study Data."
  • Boesen, Ulrik (2021). Taxation Foundation. "Several States Considering Legal Recreational Marijuana."
  • California Department of Taxation and Fee Administration (2022). "Cannabis Taxation Revenues."
  • Colorado Section of Revenue (2022). "Marijuana Revenue enhancement Reports."
  • DISA Global Solutions (2022). "Map of Marijuana Legality by Country."
  • Federation of Tax Administrators (2022). "Condition of State Taxation/Sales of Marijuana."
  • Fernandez, Cynthia (2022). Grown In. "Michigan's cannabis tax revenue blew up in 2021."
  • Illinois Department of Acquirement (2022). "Annual Written report Fiscal Year 2021."
  • Maine Department of Authoritative and Fiscal Services (2022). "Developed Employ 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). "Total Tax Revenue Collections."
  • Oregon Section of Revenue (2022). "Oregon marijuana tax statistics."
  • State of Nevada Section of Taxation (2022). "Annual Study Fiscal Yr 2021."
  • Washington State Liquor and Cannabis Board (2022). "Annual Report Financial Year 2021."