Marijuana Tax Revenue by State

In 2014, Colorado and Washington became the first states to allow the sale of cannabis products. Since then, most states have legalized medical marijuana, and half have legalized recreational marijuana as well.

Legalization of recreational marijuana is a boon for state budgets. California now regularly rakes in more than $1 billion per year in marijuana tax revenue. Many other states with thriving markets make hundreds of millions per year. Combined, states have reported $23 billion in tax revenue from recreational cannabis sales and medical marijuana sales so far.

Here are the statistics on how much revenue states get from marijuana taxes, how they tax cannabis, and what they use the money for.

Marijuana tax revenue

Marijuana tax revenue by state

The table below shows the revenue collected in states with operational marijuana markets in their most recently reported full calendar or fiscal year. An operational marijuana market is one that permits sales of recreational marijuana, medical marijuana, or both. Total tax collected varies depending on state population, how long the program has been established, and the method of taxation.

How much revenue are other states leaving on the table?

Recreational marijuana is still illegal in many states. Even in some states that have legalized it, there can be a lengthy delay between legalization and getting the market up and running. At the end of 2023, the Tax Foundation estimated marijuana tax revenue for every state.

Here are its estimates for the states that don't currently have operational recreational marijuana markets:

Medical marijuana tax collection

Medical marijuana tax collection

Not all states break down their revenue reports by medical versus recreational marijuana, but the table below shows the sources of tax revenue by type of cannabis use when data is available. The tax revenue numbers below are each state's cumulative totals through its most recent reports.

Total tax collections by state

Total tax collections by state

Colorado and Washington were leaders in the recreational marijuana movement, acting as early as 2012 to move toward legalization. As a result, they've generated more revenue from marijuana taxes than most other states, some of which have had an operational market for two years or less.

Still, the table below shows the tremendous potential for states to generate significant revenue over time. With many states dealing with declining tax revenues over the past two years, revenue from recreational marijuana could be a much needed boost. Total revenue is based on the most recent data available, which varies by state.

Total marijuana tax revenue collected by year

Total marijuana tax revenue collected by year

Total marijuana tax revenue across the United States exploded as many states legalized marijuana and built their markets. Growth has leveled off since then, but it has still increased overall every year. Marijuana tax data for 2025 comes from the most recent reports available as of July 2025.

State-by-state revenue breakdown

State-by-state revenue breakdown

Now let's take a look at how cannabis tax revenue has grown over the years for each state, as well as how those states are using the money.

Alaska's marijuana tax revenue

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

How does Alaska tax marijuana?

Alaska taxes cultivators per ounce and type: $50 per ounce for mature flowers, $25 per ounce for immature flowers, $15 per ounce for trim, and $1 for each clone.

Alaska legislators are considering a reduction in its marijuana tax rates. The Alaska House of Representatives passed House Bill 119, which would significantly lower marijuana taxes, on May 10, 2024. The bill is now assigned to the Senate Finance Committee.

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 Education Fund.

Arizona's marijuana tax revenue

Arizona voters approved Proposition 207, the Marijuana Legalization Initiative, in 2020. This ballot initiative legalized recreational marijuana under the purview of the Arizona Department of Health and Human Services. DHS began to license retail establishments on January 16, 2021.

How does Arizona tax marijuana?

Arizona imposes two taxes on marijuana:

• A 16% excise tax
• A transaction privilege tax

How does Arizona spend marijuana tax revenue?

• 33% to community college districts
• 31.4% to municipal police departments and fire departments
• 25.4% to the Arizona Higherway User Revenue Fund
• 10% to the Justice Reinvestment Fund
• 0.2% to the attorney general to administer the program

California's marijuana tax revenue

California legalized marijuana in 2016 under Proposition 64, a ballot initiative. The first retail sales in the state began in January 2018. The Department of Cannabis Control was given the responsibility for taxation and licensing.

How does California tax marijuana?

California imposes a 19% excise tax on cannabis retailers as of July 1, 2025. The previous tax rate was 15% before a tax hike by Governor Gavin Newsom.

How does California spend marijuana tax revenue?

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

Colorado's marijuana tax revenue

Colorado legalized marijuana in 2012 when it passed Colorado Amendment 64. Retail sales began in January 2014.

How does Colorado tax marijuana?

Colorado has a 15% wholesale excise tax on marijuana as well as a 15% 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 state 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 tax revenue from the wholesale tax goes to the Building Excellent Schools Today (BEST) fund. The first $40 million is earmarked for constructing new schools.

Connecticut's marijuana tax revenue

On June 22, 2021, Governor Ned Lamont signed SB 1201 into law legalizing cannabis for recreational use. Retail sales began on Jan. 10, 2023. The table below provides estimated marijuana tax revenue for Connecticut based on its marijuana retail sales and excise taxes.

How does Connecticut tax marijuana?

Connecticut imposes the following taxes on recreational marijuana:

• Excise tax of 0.625 cents per milligram of THC for cannabis flower.
• Excise tax of 2.75 cents per milligram for edibles.
• Excise tax of 0.9 cents per milligram for other products.
• 6.35% retail sales tax.
• 3% municipal sales tax.

How does Connecticut spend marijuana tax revenue?

For the 2022 and 2023 fiscal years, all revenue generated from cannabis sales was distributed to the Cannabis Regulatory and Investment Account to support administrative costs. Here's how Connecticut is distributing marijuana tax revenue for the 2024 through 2026 fiscal years:

• 15% to the General Fund
• 60% to the Social Equity and Innovation Fund
• 25% to the Prevention and Recovery Services Fund

Delaware's marijuana tax revenue

In March 2023, the Delaware General Assembly approved House Bill 1 to legalize marijuana and House Bill 2 to regulate and tax sales. Governor John Carney, who had previously vetoed a bill legalizing marijuana in 2022, neither signed nor vetoed the bills. The state authorized the sale of adult-use marijuana beginning Aug. 1, 2025.

How does Delaware tax marijuana?

Delaware will charge a 15% sales tax on recreational marijuana sales.

How does Delaware spend marijuana tax revenue?

All marijuana tax revenue will go to the Marijuana Regulation Fund. From there, 7% will be credited to the Justice Reinvestment Fund to be used for projects to improve the quality of life for communities most impacted by the prohibition of marijuana. After covering administrative costs, the legislature will decide how to distribute the remainder of the funds.

District of Columbia's marijuana tax revenue

Washington, D.C., legalized recreational marijuana in 2015. However, Congress has prevented the development of a regulatory system for the sale of marijuana.

It was previously legal to gift up to one ounce of marijuana to another individual, which resulted in a gifting economy. Stores provided marijuana as a gift with a purchase of another item. In January 2024, the D.C. Council passed new penalties for unlicensed marijuana gifting shops. Since then, regulators have been shutting down illegal marijuana shops that failed to apply for licenses to become medical marijuana dispensaries.

Illinois's marijuana tax revenue

Recreational cannabis use was approved in Illinois in May 2019 when the Cannabis Regulation and Tax Act passed under House Bill 1438. Governor J.B. Pritzker signed the legislation into law in June of the same year, and retail sales began Jan. 1, 2020.

How does Illinois tax marijuana?

Illinois charges 7% 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 35% THC, and
• 20% of value for infused cannabis products that can't be smoked.

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 Program.
• 20% to mental health and substance abuse.
• 10% to pay state bills.
• 8% to local government.
• 2% to public education.

Louisiana's marijuana tax revenue

In June 2015, Louisiana legalized medical marijuana under HB 149. Sales didn't begin until four years later in August 2019. Louisiana hasn't legalized recreational marijuana.

How does Louisiana tax marijuana?

Louisiana charges a 7% tax on sales of medical marijuana.

How does Louisiana spend marijuana tax revenue?

Marijuana tax revenue is distributed to the Community and Family Support System Fund and the Department of Agriculture and Forestry.

Maine's marijuana tax revenue

Maine legalized marijuana in 2016 under a ballot initiative, Ballot Question 1. 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 bill and retail sales began on October 9, 2020.

The Office of Cannabis Policy submits annual reports with Maine's marijuana tax revenue. However, its reports on recreational marijuana taxes are based on the calendar year, while its reports on medical marijuana taxes are based on the fiscal year, which runs from July 1 through June 30.

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 immature plant.
• $0.30 per seed.
• $35 per mature marijuana plant.

Consumers pay a 10% sales tax. The tax rate will increase to 14% starting Jan. 1, 2026.

How does Maine spend marijuana tax revenue?

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

Maryland's marijuana tax revenue

In May 2023, Governor Wes Moore signed House Bill 556 and Senate Bill 516 legalizing recreational cannabis use. Retail sales began on July 1, 2023. The table below provides estimated marijuana tax revenue for Maryland based on its marijuana retail sales and taxes.

How does Maryland tax marijuana?

Sale of adult-use cannabis in Maryland is subject to a sales and use tax rate of 12% as of July 1, 2025, after Maryland lawmakers approved an increase from the original tax rate of 9%.

How does Maryland spend marijuana tax revenue?

Marijuana tax revenue is used to cover the full operations and administrative costs of the Maryland Cannabis Administration. All remaining tax revenue is distributed as follows:

• 35% to the Community Reinvestment and Repair Fund.
• 5% to counties.
• 5% to the Cannabis Public Health Fund.
• 5% to the Cannabis Business Assistance Fund.
• Any remaining balance to the state general fund.

Massachusetts's marijuana tax revenue

Recreational marijuana use was approved in 2016 under Ballot Question 4. While retail sales were originally set to begin 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.

How does Massachusetts tax marijuana?

In Massachusetts, retail cannabis customers pay a retail excise tax of 10.75%, plus a general sales tax of 6.25%. A city or town may also levy taxes of up to 3% of marijuana sales in its locality.

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 like the Alcoholic Beverages Control Commission and the Cannabis Control Commission.

Michigan's marijuana tax revenue

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

How does Michigan tax marijuana?

Consumers currently pay a 10% excise tax and 6% sales tax. The excise tax applies only to recreational marijuana and not medical marijuana.

How does Michigan spend marijuana tax revenue?

Michigan's Marihuana Regulation Fund distributes tax revenues as follows:

• 15% to municipalities.
• 15% to counties.
• 35% to the Statewide School Aid Fund.
• 35% to the Michigan Transportation Fund.

Minnesota's marijuana tax revenue

In May 2023, Governor Tim Walz signed HF 100 into law legalizing recreational marijuana. Retail sales are expected to start in 2025.

How will Minnesota tax marijuana?

Adult-use cannabis sales will be subject to a 15% special sales tax in addition to the existing state sales tax of 6.875%.

How will Minnesota spend marijuana tax revenue?

Marijuana tax revenue will be split 80/20 between state and local government. Funds are expected to be used for prevention, outreach, education, and data collection.

Missouri's marijuana tax revenue

In November 2018, Missouri voters approved Amendment 2, legalizing the medical use of marijuana for qualifying patients. Medical marijuana sales began on Oct. 17, 2020. In November 2022, Missouri voters approved Amendment 3, and recreational marijuana became legal the following month. Retail sales began on Feb. 3, 2023. The table below provides marijuana tax estimates based on Missouri's reported adult-use and medical marijuana sales.

How does Missouri tax marijuana?

Missouri applies a 6% sales tax on recreational marijuana sales. It applies a 4% sales tax on marijuana sold for medical use.

How does Missouri spend marijuana tax revenue?

Marijuana tax revenue is first used to cover operational costs and then to expenses incurred by the court system for expunging marijuana expenses from people's criminal records. Remaining revenues are split three ways:

• Public defenders.
• Drug addiction treatment.
• Veterans.

Montana's marijuana tax revenue

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

How does Montana tax marijuana?

Montana has separate 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 revenue?

Montana's marijuana tax revenue is distributed as follows:

• 54% to the state's General Fund, which can be used to pay for programs the legislature prioritizes every two years like healthcare, education, and infrastructure
• 11% to the HEART fund, which supports substance abuse treatment and recovery programs
• 3% to veterans and surviving spouses
• 4% to Montana State Parks, the Montana Trail Stewardship Grant Program, and non-game wildlife conservation
• 20% to the Habitat Legacy Account, which supports Montana State Parks, trails, working lands, public access, and wildlife habitat

Nevada's marijuana tax revenue

Recreational marijuana sales were approved in 2016 under Ballot Question 2. The ballot initiative indicated retail sales were to start in January of 2017, the Department of Taxation pushed the start date back to July 1, 2017.

How does Nevada tax marijuana?

Nevada taxes weed at the retail (10% of purchase) and wholesale (15% of fair market value) levels. There is also a 6.85% sales tax as 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 day fund. Revenue from the wholesale tax goes to cover expenses and boost the rainy fund as well.

New Jersey's marijuana tax revenue

In February 2021, Governor Phil Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act into law. Recreational marijuana sales began on April 21, 2022.

How does New Jersey tax marijuana?

New Jersey imposes a 6.625% sales tax on recreational marijuana. Medical marijuana sales are tax-free as of July 1, 2022.

How does New Jersey spend marijuana tax revenue?

At least 70% of all marijuana tax revenues are used for investing in impact zones, which are defined as cities with high crime indexes or high unemployment rates. The remainder is used to:

• Oversee development, regulation, and enforcement of activities associated with the personal use of cannabis.
• Reimburse the cost of training police officers to detect and apprehend drug-impaired drivers.
• Further investments in impact zones, including direct financial assistance for people living in them.
• Any remaining money is deposited in the state general fund.

New Mexico's marijuana tax revenue

In March of 2021, the New Mexico legislature passed the Cannabis Regulation Act to allow commercial production and sales to residents 21 and over. Commercial sales began on April 1, 2022. The table below provides marijuana tax revenue estimates based on New Mexico's reported adult-use marijuana sales.

How does New Mexico tax marijuana?

New Mexico imposes an excise tax on recreational cannabis. The excise tax rate was 12% for sales prior to July 1, 2025 and is increasing by 1% per year until it reaches 18% on July 1, 2030. All recreational marijuana sales in New Mexico are also subject to a gross receipts tax (GRT), which varies by county.

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

New York's marijuana tax revenue

Medical marijuana was legalized in 2016, and sales started that same year. Recreational marijuana sales were legalized in New York by S. 854, which was signed into law by Governor Andrew Cuomo in March 2021. Retail sales started on Dec. 29, 2022.

How does New York tax marijuana?

New York imposes the following taxes on adult-use marijuana sales:

• 0.5 cent/milligram of THC in flower
• 0.8 cent/milligram of THC in concentrate
• 3 cents/milligram of THC in edibles
• 9% retail tax
• 4% state local tax

Medical marijuana has an excise tax of 3.15%.

How does New York spend marijuana tax revenue?

After covering up-front costs, here's how New York distributes marijuana tax revenue:

• 40% to the State Lottery fund for education purposes.
• 40% to the Community Grants Reinvestment Fund.
• 20% to the Drug Treatment and Public Education Fund.

Ohio's marijuana tax revenue

Ohio legalized recreational marijuana in 2023 when voters approved Ohio Issue 2. Recreational marijuana sales began on Aug. 6, 2024.

How does Ohio tax marijuana?

Ohio imposes a 10% excise tax on recreational marijuana sales.

How does Ohio spend marijuana tax revenue?

Here's how Ohio distributes its marijuana tax revenue:

• 36% to the Cannabis Social Equity and Jobs Fund for social equity and jobs initiatives
• 36% to the Host Community Cannabis Fund to benefit municipal corporations and/or townships with adult-use dispensaries
• 25% to the Substance Abuse and Addiction Fund to support substance abuse and addiction services
• 3% to the Division of Cannabis Control and Tax Commissioner Fund to support its operations and cover the tax administration costs

Oklahoma's marijuana tax revenue

In June 2018, Oklahoma voters authorized the state's medical marijuana program by passing State Question 788. Oklahoma hasn't legalized recreational marijuana.

How does Oklahoma tax marijuana?

Oklahoma charges a 7% excise tax on medical marijuana sales.

How does Oklahoma spend marijuana tax revenue?

Marijuana tax revenue in Oklahoma goes into the Medical Marijuana Tax Fund, where it's used to fund substance abuse services and common education.

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 start October 1, 2015. Sales were initially managed through medical dispensaries and the state began granting recreational licenses in October of 2016.

How does Oregon tax marijuana?

Oregon retailers charge a 17% state retail tax on marijuana products. In some cases, retailers must also charge an additional 3% for Oregon localities.

How does Oregon spend marijuana tax revenue?

• 40% to the state school fund.
• 20% to mental health, alcoholism, and drug services.
• 15% to the Oregon State Police.
• 5% to the Oregon Health Authority for drug treatment and prevention.
• 10% to cities.
• 10% to counties.

Rhode Island's marijuana tax revenue

In May 2022, Governor Dan McKee signed the Rhode Island Cannabis Act legalizing the use and sale of recreational marijuana. Retail sales began Dec. 1, 2022. The table below provides estimated marijuana tax revenue for Rhode Island based on its marijuana retail sales.

How does Rhode Island tax marijuana?

Rhode Island imposes a 20% tax rate on marijuana, split into three parts:

• 7% sales tax.
• 10% excise tax.
• 3% municipality tax.

Medical marijuana has a 7% sales tax.

How does Rhode Island spend marijuana tax revenue?

All taxes and fees from adult-use cannabis businesses are deposited into a social equity fund. The Cannabis Control Commission uses funds to:

• Provide grants to approved social equity applicants.
• Promote job training for social equity applicants.
• Reduce or waive application and licensing fees for social equity applicants.
• Administer programming for jail diversion, drug rehabilitation, and education workforce development.

Vermont's marijuana tax revenue

Vermont legalized the possession of recreational marijuana in 2018. Retail sales operations began on Oct. 1, 2022.

How does Vermont tax marijuana?

Vermont imposes a 14% excise tax on marijuana at the point of sale. There's also a 6% general sales tax.

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

Virginia's marijuana tax revenue

In July 2021, Virginia lawmakers voted to legalize recreational marijuana, and retail sales were expected to start in 2024. Governor Glenn Youngkin vetoed the bill, and he also vetoed an identical bill that passed earlier this year. Proponents of legalized marijuana in Virginia hope to get the law passed after Youngkin's term, which ends in January 2026.

How will Virginia tax marijuana?

Virginia will impose a 21% excise tax on recreational marijuana sales. There's also a 5.3% sales tax, which applies to the sale of both recreational and medical marijuana.

Washington's marijuana tax revenue

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

How does Washington tax marijuana?

Washington charges a 37% retail tax on marijuana as well as a 6.5% retail sales tax. Medical cannabis is exempt from sales tax.

How does Washington spend marijuana tax revenue?

Washington distributes marijuana tax revenue to healthcare, the state general fund, local governments, and state-run programs. Healthcare received more than half of Washington's marijuana tax revenues in 2024. The next largest recipient was the general fund, which received about one-fifth of marijuana tax revenue. Marijuana legalization around the U.S.

The status of marijuana legalization around the United States

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:

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Will the marijuana market continue to grow?

While there's no way to predict which states will legalize recreational marijuana, it seems to be a trend that's gaining momentum. Of course, as long as marijuana remains illegal at the federal level, there will be questions about the legality of growing, transporting, distributing, banking, and other issues.

Will continued support from marijuana investors and the general public encourage states and the federal government to move toward legalization? It's impossible to say, but the trend does seem to be heading toward further legalization throughout the U.S.

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