In 2014, Colorado and Washington became the first states to permit 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 ballot initiatives in place that would do so.

The map below from the Federation of Tax Administrators shows the status of marijuana laws across the United states.

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

Prototype source: Federation of Taxation Administrators (2022).

Legalization of cannabis products has been a boon for state budgets, with states reporting a combined total of $10.4 billion in tax acquirement from cannabis sales as of the shut of 2021, not including whatever revenue produced by medical marijuana distribution. Local towns and cities with thriving marijuana operations take likewise generated millions.

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

Marijuana taxation acquirement by state 2021

The tabular array below shows the acquirement collected in states with operational marijuana programs in 2021. Full tax collected varies depending on state population, how long the program has been established, and the method of taxation.

Country

2021 marijuana tax revenue

Alaska

$30,054,250

Arizona

$219,413,828

California

$1,294,632,799

Colorado

$423,486,053

Illinois

$317,074,562

Maine

$4,910,962

Massachusetts

$176,731,045

Michigan

$246,657,520

Nevada

$157,752,000

Oregon

$178,262,488

Washington

$559,500,000

A number of states accept legalized recreational marijuana only take a less-than-fully operational marketplace. In 2021, the Tax Foundation has estimated excise tax revenue for states with a market that has been operational for at to the lowest degree three years. Hither's how much these states may stand to make once their markets are fully established:

State

Estimated annual marijuana excise taxation acquirement 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

Information source: Revenue enhancement Foundation (2021).

Of course, these states aren't probable to run into these numbers in excise revenue enhancement revenue until at least three years after they establish a market. Seeing numbers in the $ii–$10 million range is more than probable in early years.

Only 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 taxation figures and the number of marijuana-using residents in each land, the Revenue enhancement Foundation estimated the potential excise tax revenue with a market place established for at least iii years.

Here'south 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

Northward Dakota

$xiii,231,599

Ohio

$220,827,478

Oklahoma

$67,680,000

Pennsylvania

$244,553,615

Rhode Island

$35,455,500

Southward 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 revenue enhancement collection

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

State

Revenue from Medical Marijuana

Revenue from Adult Use Recreational Marijuana

Arizona

$l,002,000

$63,413,000

Maine

$iii,969,914.00

$941,048 for recreational

Nevada

$147

$157,752,000

Total taxation collections by state

Colorado and Washington were leaders in the recreational marijuana movement, interim every bit early as 2012 to motility 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 two years or less.

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

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

State

First year of tax drove

Total acquirement collected (equally 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

At present let'southward take a expect at how cannabis tax revenue has grown over the years for each country -- too equally how those states are using that money.

Alaska's marijuana tax revenue

Alaska canonical the legalization of marijuana in 2014 under Election Measure out 2. Retail sales began in October of 2016. The Marijuana Control Board was tasked with both licensing and tracking cannabis operations statewide.

Yr

Alaska state marijuana tax acquirement

2017

$i,749,497

2018

$10,801,357

2019

$19,082,542

2020

$24,213,296

2021

$xxx,054,250

How does Alaska tax marijuana?

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

How does Alaska spend marijuana revenue enhancement 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 Education Fund.

Arizona'southward marijuana tax revenue

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

In its beginning twelvemonth of operations, Arizona collected more than $217 meg in tax revenue from both adult use sales, medical employ sales, and excise taxes.

Year

Arizona state marijuana tax revenue

2021

$217,553,000

How does Arizona tax marijuana?

Arizona imposes two taxes on marijuana:

  • A sixteen% excise taxation
  • A transaction privilege tax

How does Arizona spend marijuana revenue enhancement revenue?

Excise tax revenues are dedicated to:

  • Community colleges
  • Municipal police force
  • Burn down districts
  • The Highway User Fund
  • The Justice Reinvestment Fund
  • The Attorney Full general

California's marijuana taxation revenue

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

Year

California state marijuana tax revenue

2018

$397,720,611

2019

$638,081,178

2020

$1,031,879,926

2021

$1,294,632,799

How does California tax marijuana?

California taxes are as follows: $9.65 per ounce for flower, $2.87 per ounce for leaves, and $ane.35 per ounce for fresh institute.

How does California spend marijuana tax revenue?

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

Colorado's marijuana tax acquirement

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 tax marijuana?

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

How does Colorado spend marijuana tax revenue?

  • 10% goes to local governments.
  • 90% goes to the state government.
  • 15.56% of the land revenue goes to the general fund.
  • 12.59% goes to the land public school fund.
  • 71.85% goes to the marijuana tax cash fund.

The cannabis taxation revenue from the wholesale tax goes to the Edifice Splendid Schools Today (Best) fund. The first $40 1000000 is earmarked for constructing new schools.

Connecticut's marijuana tax revenue

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

The State Part of Financial Analysis anticipates full state and municipal revenue enhancement acquirement will equal $4.1 million in fiscal year 2022, and will reach 73.iv million by financial year 2026.

How will Connecticut tax marijuana?

Connecticut will impose the following taxes on recreational marijuana:

  • Excise taxation of 0.625 cents per milligram of THC for cannabis bloom
  • Excise tax of 0.9 cents per milligram for other products
  • 2.75 cents per milligram for edibles
  • half dozen.35% retail sales revenue enhancement
  • iii% municipal sales revenue enhancement

How volition Connecticut spend marijuana tax revenue?

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

  • 15% will get to the general fund
  • 60% of the remaining acquirement will get towards social equity programs
  • 25% of the remaining revenue will get towards substance misuse treatment programs

Illinois'due south marijuana tax revenue

Recreational cannabis employ was approved in Illinois in May of 2019 when the Cannabis Regulation and Tax Deed passed under Firm Bill 1438. The Governor signed the legislation into law in June of the aforementioned year, and retail sales began January ane, 2020.

Twelvemonth

Illinois state marijuana taxation revenue

2020

$52,783,471

2021

$317,074,561

How does Illinois revenue enhancement marijuana?

Illinois charges 7% of cannabis products' value in wholesale taxes. It also levies the post-obit 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
  • xx% of value for infused cannabis products that can't exist smoked.

Full general sales tax also applies.

How does Illinois spend marijuana tax revenue?

  • 35% to the general fund.
  • 25% to the Illinois Recover, Reinvest and Renew Plan.
  • 20% to mental health and substance abuse.
  • 10% to pay state bills.
  • 8% to local government.
  • 2% to public education.

Maine'due south marijuana tax revenue

Maine legalized marijuana in 2016 under a ballot initiative, Ballot Question one. In response, the Legislature passed LD 1719, an Deed to Implement a Regulatory Structure for Developed Utilize Marijuana. The Legislature overrode the governor'southward veto of the bill and retail sales began on October 9, 2020.

Year

Maine state marijuana revenue enhancement revenue

2018

$ 2,444,917.74 (medical only)

2019

$ ii,597,338.25 (medical only)

2020

$4,911,000 (medical and recreational)

The Country of Maine operates on a fiscal yr that runs from July ane through June 30. Accordingly, revenue and expense data from state fiscal year 2020 covers the period from July 1, 2019 through the conclusion of the fiscal year on June 30, 2020.

How does Maine taxation marijuana?

Hither's how Maine taxes marijuana cultivators:

  • $335 per pound of flower.
  • $94 per pound of trim.
  • $1.fifty per bulb or immature found.
  • $0.30 per seed.

Consumers volition also pay a ten% sales revenue enhancement.

How does Maine spend marijuana tax revenue?

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

Massachusetts's marijuana tax acquirement

Recreational marijuana use was canonical in 2016 nether Election Question four. While retail sales were originally gear up to brainstorm in January of 2018, this was delayed until July i, 2018 under Legislation H 3818. The state'due south first retail shop opened in November of 2018.

Twelvemonth

Massachusetts state marijuana tax revenue

2019

$22,058,544

2020

$81,734,083

2021

$176,731,045.43

How does Massachusetts taxation marijuana?

In Massachusetts, retail cannabis customers pay a retail excise taxation of ten% plus a general sales tax of half-dozen.25%.

How does Massachusetts spend marijuana tax revenue?

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

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

Montana'southward marijuana tax acquirement

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

In January of 2022, an estimated $22.half dozen meg in marijuana sales were made and generated $2.96 meg in tax revenue.

How does Montana tax marijuana?

Montana has separate tax structures for recreational and medical marijuana. The post-obit taxes utilise:

  • xx% adult use recreational sales taxation
  • 4% medical use sales tax

How does Montana spend marijuana tax revenue?

Montana'south marijuana taxation revenue is distributed as follows:

  • $6,000,000 to the Center program
  • twenty% of remaining revenue to Fish, Wild fauna and Parks
  • $200,000 to veterans and surviving spouses
  • $150,000 to crisis treatment and training
  • Residuum to general fund

Michigan's marijuana revenue enhancement acquirement

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

Year

Michigan state marijuana revenue enhancement revenue

2020

$45,700,000

2021

$246,657,520

How does Michigan tax marijuana?

Consumers currently pay a x% excise tax and 6% sales taxation. The excise tax applies only to recreational, not medical marijuana.

How does Michigan spend marijuana revenue enhancement revenue?

In the starting time two years of legalization, $20 million in revenue will go to medical marijuana inquiry. The rest volition be separate betwixt cities, townships, villages, counties, the land's School Aid Fund, and the Michigan Transportation Fund.

Nevada's marijuana revenue enhancement revenue

Recreational marijuana sales were approved in 2016 under Ballot Question 2. The election initiative indicated retail sales were to beginning in January of 2017, the Section of Tax pushed the start date back to July i, 2017.

Twelvemonth

Nevada state 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 (10% of purchase) and wholesale (fifteen% of fair market value) levels. There is as well a half-dozen.85% sales revenue enhancement too as local taxes charged in some municipalities.

How does Nevada spend marijuana tax revenue?

Income from the retail tax goes to the land's rainy solar day fund. Revenue from the wholesale tax goes to encompass expenses and boost the rainy fund every bit well.

New Mexico'south marijuana taxation revenue

In March of 2021, the New Mexico legislature passed the Cannabis Regulation Act to permit commercial product and sales to residents 21 and over. Commercial sales are expected to begin on Apr ane, 2022.

The Legislative Finance Commission estimates that the first fiscal year of recreational marijuana sales would produce approximately $19.1 million in net country tax revenue and an additional $9.iv 1000000 in acquirement for local governments. The land tax revenue is expected to increase to $30.1 meg in financial year 2023 to 2024.

How volition New Mexico tax marijuana?

New Mexico will impose several taxes on recreational cannabis including the following:

  • A 12% excise revenue enhancement, which volition increase to eighteen% by 2030
  • A gross receipts revenue enhancement, which varies by canton

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

How will New Mexico spend marijuana tax revenue?

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

New York's marijuana tax revenue

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

The get-go yr of retail sales is expected to produce $twenty 1000000 in tax acquirement and fees, which is projected to grow to $115 one thousand thousand in 2022 to 2023; $158 one thousand thousand in 2023 to 2024; and $245 million in 2024 to 2025.

How will New York tax marijuana?

New York will impose the post-obit taxes on marijuana sales:

  • 0.v cent/milligram of THC in flower
  • 0.8 cent/milligram of THC in concentrate
  • 0.3 cent/milligram of THC in edibles
  • 9% retail tax
  • 4% land local tax

How volition New York spend marijuana tax revenue?

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

Oregon's marijuana taxation revenue

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

Yr

Oregon country marijuana revenue enhancement acquirement

2016

$20,652,983

2017

$70,263,897

2018

$82,203,729

2019

$102,094,948

2020

$133,150,349

2021

$178,262,488

How does Oregon tax marijuana?

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

How does Oregon spend marijuana tax acquirement?

  • 40% to the land school fund.
  • 20% to mental health, alcoholism, and drug services.
  • 15% to the Oregon country constabulary.
  • 5% to the Oregon Wellness Authority for drug treatment and prevention.
  • xx% to cities and counties.

Vermont's marijuana tax revenue

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

How will Vermont revenue enhancement marijuana?

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

A research written report published by the RAND Corporation suggests that ambitious tax could produce between $20 and $75 million in annual revenue for the state.

How volition Vermont spend marijuana tax revenue?

Beak S.54 states that "revenue from the sales and employ tax imposed . . . on retail sales of cannabis or cannabis products in this Country shall be used to fund a grant program to showtime or expand afterschool and summer learning programs, with a focus on increasing access in underserved areas of the Country."

Washington's marijuana tax revenue

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

Yr

Washington state marijuana tax acquirement

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 equally well equally a half dozen.five% retail sales revenue enhancement. Medical cannabis is exempt from sales tax.

How does Washington spend marijuana tax acquirement?

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

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

The status of marijuana legalization effectually the U.s.

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

Land

Marijuana Legalization Condition

Alabama

Medical simply

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 only

Georgia

Medical CBD oil only

Hawaii

Medical only

Idaho

Illegal

Illinois

Recreational legalized

Indiana

Medical CBD oil only

Iowa

Medical CBD oil just

Kansas

Illegal

Kentucky

Medical CBD oil merely

Louisiana

Medical only

Maine

Recreational legalized

Maryland

Medical only

Massachusetts

Recreational legalized

Michigan

Recreational legalized

Minnesota

Medical only

Mississippi

Medical only

Missouri

Medical only

Montana

Recreational legalized

Nebraska

Illegal

Nevada

Recreational legalized

New Hampshire

Medical merely

New Jersey

Recreational legalized

New United mexican states

Recreational legalized

New York

Recreational legalized

Due north Carolina

Illegal

N Dakota

Medical merely

Ohio

Medical only

Oklahoma

Medical only

Oregon

Recreational legalized

Pennsylvania

Medical only

Rhode Island

Medical but

South Carolina

Illegal

South Dakota

Medical only

Tennessee

Medical CBD oil simply

Texas

Medical CBD oil only

Utah

Medical simply

Vermont

Recreational legalized

Virginia

Recreational legalized

Washington

Recreational legalized

West Virginia

Medical only

Wisconsin

Medical CBD oil only

Wyoming

Illegal

Sources

  • Alaska Department of Revenue (2022). "Marijuana Tax Annual Study Information."
  • Boesen, Ulrik (2021). Revenue enhancement 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 Country."
  • Federation of Revenue enhancement Administrators (2022). "Condition of State Taxation/Sales of Marijuana."
  • Fernandez, Cynthia (2022). Grown In. "Michigan's cannabis revenue enhancement acquirement blew up in 2021."
  • Illinois Department of Revenue (2022). "Annual Report Financial Year 2021."
  • Maine Department of Administrative and Financial Services (2022). "Developed Apply Marijuana Plan."
  • Marijuana Policy Project (2022). "Cannabis Tax Revenue in States that Regulate Cannabis for Developed Employ."
  • Office on the Comptroller, Republic of Massachusetts (2022). "Total Tax Revenue Collections."
  • Oregon Section of Acquirement (2022). "Oregon marijuana tax statistics."
  • Land of Nevada Section of Taxation (2022). "Annual Report Fiscal Twelvemonth 2021."
  • Washington State Liquor and Cannabis Board (2022). "Annual Report Fiscal Year 2021."