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

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

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

Epitome source: Federation of Tax Administrators (2022).

Legalization of cannabis products has been a boon for state budgets, with states reporting a combined total of $10.4 billion in revenue enhancement acquirement from cannabis sales equally of the close of 2021, non including whatever revenue produced by medical marijuana distribution. Local towns and cities with thriving marijuana operations accept 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 taxation revenue by state 2021

The tabular array below shows the revenue collected in states with operational marijuana programs in 2021. Total revenue enhancement collected varies depending on land population, how long the program has been established, and the method of taxation.

State

2021 marijuana revenue enhancement revenue

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 take 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 three years. Hither's how much these states may stand to make once their markets are fully established:

State

Estimated annual marijuana excise tax revenue from fully operational market

District of Columbia

$26,605,996

Montana

$35,142,502

New Bailiwick of jersey

$158,974,353

Vermont

$27,313,974

Data source: Tax Foundation (2021).

Of course, these states aren't likely to see these numbers in excise tax revenue until at least iii years subsequently they establish a marketplace. Seeing numbers in the $2–$10 million range is more probable 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 table?

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 least three years.

Here's what they found:

State

Potential Marijuana Revenue enhancement Revenue

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

North Carolina

$182,947,622

Due 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

W Virginia

$38,327,540

Wisconsin

$117,791,078

Wyoming

$10,054,045

Data source: Tax Foundation (2021).

Medical marijuana tax drove

Non all states pause downward their revenue reports past medical versus recreational marijuana, but the tabular array beneath shows the sources of tax revenue by blazon of cannabis use when data is bachelor.

State

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 revenue enhancement collections by state

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

Still, the tables below testify the tremendous potential for states to generate significant revenue over fourth dimension. In fact, the Tax Foundation estimates the market for legal marijuana could be worth as much as $30 billion by 2023.

With states facing upkeep 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 current markets.

State

Get-go twelvemonth of taxation collection

Total acquirement collected (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

$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

$two,346,930,000

Now let'due south take a look at how cannabis tax revenue has grown over the years for each state -- also as how those states are using that coin.

Alaska's marijuana tax acquirement

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

Yr

Alaska state marijuana tax revenue

2017

$1,749,497

2018

$10,801,357

2019

$19,082,542

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 $i for each clone.

How does Alaska spend marijuana tax revenue?

  • 25% to the general fund.
  • 50% to the Department of Public Safety, Health and Social Services, and Department of Corrections.
  • 25% to the Marijuana Instruction Fund.

Arizona's marijuana tax revenue

Arizona voters approved Proffer 216, the Marijuana Legalization Initiative, in 2020. This ballot initiative legalized recreational marijuana under the purview of the Arizona Department of Health and Human being Services. DHS began to license retail establishments on Jan 16, 2021.

In its commencement year of operations, Arizona collected more than than $217 million in revenue enhancement revenue from both developed apply sales, medical use sales, and excise taxes.

Yr

Arizona state marijuana tax revenue

2021

$217,553,000

How does Arizona tax marijuana?

Arizona imposes 2 taxes on marijuana:

  • A 16% excise tax
  • 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'south marijuana tax revenue

California legalized marijuana in 2016 under Suggestion 64, a ballot initiative. The offset retail sales in the country began in Jan of 2018 and in Nov of that yr, medical marijuana was exempted from the country sales taxation. The Department of Cannabis Control was vested with responsibility for taxation and licensing.

Twelvemonth

California country marijuana tax 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 flower, $2.87 per ounce for leaves, and $1.35 per ounce for fresh establish.

How does California spend marijuana tax revenue?

  • First, the revenue covers regulatory and enquiry costs.
  • And then, 60% goes to anti-drug programs targeting kids;
  • twenty% goes to environmental programs; and
  • 20% goes to public safety.

Colorado'due south marijuana taxation revenue

Twelvemonth

Colorado country marijuana tax acquirement

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 revenue enhancement marijuana?

Colorado has a xv% wholesale excise taxation on marijuana also every bit a 15% retail excise tax. Recreational marijuana is exempted from general sales taxation.

How does Colorado spend marijuana tax revenue?

  • 10% goes to local governments.
  • ninety% goes to the state regime.
  • 15.56% of the state revenue goes to the general fund.
  • 12.59% goes to the country public school fund.
  • 71.85% goes to the marijuana tax cash fund.

The cannabis taxation revenue from the wholesale taxation goes to the Building Splendid Schools Today (BEST) fund. The first $xl million is earmarked for amalgam new schools.

Connecticut'southward marijuana tax revenue

On June 22, 2021, Governor Lamont signed SB 1201 into law, legalizing cannabis for recreational employ. Retail sales will begin past the terminate of 2022.

The State Office of Fiscal Analysis anticipates full state and municipal revenue enhancement revenue will equal $4.1 million in fiscal year 2022, and will reach 73.iv 1000000 past fiscal year 2026.

How volition Connecticut tax marijuana?

Connecticut volition impose the post-obit taxes on recreational marijuana:

  • Excise taxation of 0.625 cents per milligram of THC for cannabis flower
  • Excise revenue enhancement of 0.9 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 start ii fiscal years, acquirement generated from Cannabis sales will exist used to support authoritative costs. In subsequent years:

  • 15% will go to the full general fund
  • sixty% of the remaining revenue will go towards social disinterestedness programs
  • 25% of the remaining revenue will go towards substance misuse treatment programs

Illinois'due south marijuana tax revenue

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

Twelvemonth

Illinois state marijuana tax acquirement

2020

$52,783,471

2021

$317,074,561

How does Illinois tax marijuana?

Illinois charges 7% of cannabis products' value in wholesale taxes. Information technology 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 can't be smoked.

General sales taxation also applies.

How does Illinois spend marijuana taxation revenue?

  • 35% to the general fund.
  • 25% to the Illinois Recover, Reinvest and Renew Program.
  • xx% to mental wellness and substance abuse.
  • 10% to pay state bills.
  • eight% to local government.
  • 2% to public pedagogy.

Maine's marijuana revenue enhancement revenue

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

Year

Maine state marijuana tax 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 1 through June xxx. Accordingly, acquirement and expense information from land fiscal year 2020 covers the period from July ane, 2019 through the determination of the fiscal year on June 30, 2020.

How does Maine tax marijuana?

Here's how Maine taxes marijuana cultivators:

  • $335 per pound of bloom.
  • $94 per pound of trim.
  • $1.l per seedling or immature plant.
  • $0.30 per seed.

Consumers will also pay a ten% sales tax.

How does Maine spend marijuana tax acquirement?

  • 12% to Adult Apply Marijuana Public Wellness and Condom Fund.
  • 88% to the general fund.

Massachusetts'south marijuana tax revenue

Recreational marijuana utilise was canonical in 2016 under Election Question four. While retail sales were originally set to begin in Jan of 2018, this was delayed until July 1, 2018 under Legislation H 3818. The state'due south first retail shop opened in Nov of 2018.

Twelvemonth

Massachusetts state marijuana tax acquirement

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 10% plus a general sales taxation of 6.25%.

How does Massachusetts spend marijuana tax revenue?

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

The excise tax back up programs like the Alcoholism Administration and the Cannabis Command Commission.

Montana'south marijuana revenue enhancement revenue

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

In January of 2022, an estimated $22.six meg in marijuana sales were fabricated and generated $two.96 million in tax revenue.

How does Montana tax marijuana?

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

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

How does Montana spend marijuana tax revenue?

Montana'south marijuana tax revenue is distributed as follows:

  • $6,000,000 to the HEART programme
  • 20% of remaining revenue to Fish, Wild animals and Parks
  • $200,000 to veterans and surviving spouses
  • $150,000 to crisis treatment and grooming
  • Remainder to general fund

Michigan's marijuana tax acquirement

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 ten% excise tax and half dozen% sales tax. The excise revenue enhancement applies only to recreational, not medical marijuana.

How does Michigan spend marijuana taxation revenue?

In the first two years of legalization, $twenty million in acquirement will go to medical marijuana inquiry. The rest will exist split between cities, townships, villages, counties, the state's Schoolhouse Assist Fund, and the Michigan Transportation Fund.

Nevada's marijuana tax acquirement

Recreational marijuana sales were approved in 2016 under Election Question 2. The ballot initiative indicated retail sales were to first in January of 2017, the Department of Taxation pushed the offset appointment dorsum to July 1, 2017.

Year

Nevada state marijuana taxation revenue

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 (x% of buy) and wholesale (15% of fair market value) levels. In that location is too a six.85% sales tax too 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. Revenue from the wholesale taxation goes to cover 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 allow commercial production and sales to residents 21 and over. Commercial sales are expected to begin on Apr 1, 2022.

The Legislative Finance Committee estimates that the start fiscal twelvemonth of recreational marijuana sales would produce approximately $19.1 meg in net state taxation revenue and an additional $9.4 meg in revenue for local governments. The land tax revenue is expected to increase to $thirty.1 one thousand thousand in financial year 2023 to 2024.

How will New United mexican states revenue enhancement marijuana?

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

  • A 12% excise tax, which will increase to eighteen% past 2030
  • A gross receipts tax, which varies past county

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

How volition New Mexico spend marijuana revenue enhancement revenue?

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

New York's marijuana tax revenue

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

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

How volition New York tax marijuana?

New York will impose the following taxes on marijuana sales:

  • 0.v cent/milligram of THC in blossom
  • 0.eight cent/milligram of THC in concentrate
  • 0.iii cent/milligram of THC in edibles
  • ix% retail taxation
  • 4% state local tax

How volition New York spend marijuana tax revenue?

New York is expecting to use the revenue enhancement revenue from marijuana sales to kickoff the decline in acquirement resulting from a reduction in taxable cigarette consumption.

Oregon's marijuana tax acquirement

Oregon legalized recreational marijuana in 2014 when voters approved Initiative Mensurate 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 October of 2016.

Year

Oregon state marijuana revenue enhancement 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 charge a 17% country retail tax on marijuana products.

How does Oregon spend marijuana revenue enhancement revenue?

  • 40% to the land schoolhouse fund.
  • 20% to mental health, alcoholism, and drug services.
  • 15% to the Oregon state police.
  • 5% to the Oregon Wellness Say-so for drug treatment and prevention.
  • 20% to cities and counties.

Vermont's marijuana taxation revenue

Vermont legalized the possession of recreational marijuana in 2018, though taxes take only more recently been passed. Retail sales operations are expected to brainstorm 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 also a 6% general sales tax.

A research report published by the RAND Corporation suggests that ambitious taxation could produce between $20 and $75 meg in almanac 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 Country shall be used to fund a grant program to outset or expand afterschool and summer learning programs, with a focus on increasing access in underserved areas of the State."

Washington'southward marijuana tax revenue

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

Yr

Washington country 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 every bit well as a 6.5% retail sales tax. Medical cannabis is exempt from sales revenue enhancement.

How does Washington spend marijuana tax revenue?

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

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

The condition of marijuana legalization effectually the United states

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

Country

Marijuana Legalization Condition

Alabama

Medical merely

Alaska

Recreational legalized

Arizona

Recreational legalized

Arkansas

Medical only

California

Recreational legalized

Colorado

Recreational legalized

Connecticut

Recreational legalized

Delaware

Medical merely

District of Columbia

Recreational legalized

Florida

Medical but

Georgia

Medical CBD oil only

Hawaii

Medical merely

Idaho

Illegal

Illinois

Recreational legalized

Indiana

Medical CBD oil merely

Iowa

Medical CBD oil simply

Kansas

Illegal

Kentucky

Medical CBD oil just

Louisiana

Medical only

Maine

Recreational legalized

Maryland

Medical only

Massachusetts

Recreational legalized

Michigan

Recreational legalized

Minnesota

Medical just

Mississippi

Medical only

Missouri

Medical only

Montana

Recreational legalized

Nebraska

Illegal

Nevada

Recreational legalized

New Hampshire

Medical merely

New Jersey

Recreational legalized

New Mexico

Recreational legalized

New York

Recreational legalized

North Carolina

Illegal

Northward Dakota

Medical only

Ohio

Medical only

Oklahoma

Medical only

Oregon

Recreational legalized

Pennsylvania

Medical only

Rhode Island

Medical only

Southward Carolina

Illegal

Due south Dakota

Medical only

Tennessee

Medical CBD oil just

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 simply

Wyoming

Illegal

Sources

  • Alaska Department of Revenue (2022). "Marijuana Taxation Annual Report Data."
  • Boesen, Ulrik (2021). Tax Foundation. "Several States Considering Legal Recreational Marijuana."
  • California Department of Tax and Fee Administration (2022). "Cannabis Revenue enhancement Revenues."
  • Colorado Department of Revenue (2022). "Marijuana Tax Reports."
  • DISA Global Solutions (2022). "Map of Marijuana Legality by State."
  • Federation of Tax Administrators (2022). "Status of Land Tax/Sales of Marijuana."
  • Fernandez, Cynthia (2022). Grown In. "Michigan'south cannabis tax revenue blew up in 2021."
  • Illinois Department of Revenue (2022). "Almanac Report Fiscal Year 2021."
  • Maine Section of Administrative and Fiscal Services (2022). "Adult Use Marijuana Program."
  • Marijuana Policy Projection (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 Department of Acquirement (2022). "Oregon marijuana revenue enhancement statistics."
  • Country of Nevada Department of Taxation (2022). "Annual Report Fiscal Twelvemonth 2021."
  • Washington State Liquor and Cannabis Lath (2022). "Almanac Report Fiscal Year 2021."