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 almost 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 generate hundreds of millions of dollars per year. Combined, states have reported over $25 billion in tax revenue from recreational cannabis sales and medical marijuana sales so far.

Here are the statistics on the revenue states receive from marijuana taxes, how they tax cannabis, and how they allocate the funds.

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:

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.

How does Alaska spend marijuana tax revenue?

• 25% to the general fund.
• 50% to the Department of Public Safety, Health and Social Services, and the 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. The DHS began licensing retail establishments on Jan. 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 Highway User Revenue Fund
• 10% to the Justice Reinvestment Fund
• 0.2% to the attorney general to administer the program

Arkansas's marijuana tax revenue

Arkansas legalized medical marijuana in November 2016, and sales started in May 2019. Arkansas hasn't legalized recreational marijuana.

How does Arkansas tax marijuana?

Arkansas sales tax of 6.5% applies to medical marijuana sales. The state also charges a 4% privilege tax on purchases made by dispensaries from cultivators.

How does Arkansas spend marijuana tax revenue?

Most medical marijuana tax revenue in Arkansas goes to the University of Arkansas for Medical Sciences National Cancer Designation Trust Fund. In February 2025, Governor Sarah Huckabee Sanders signed SB 59 into law, which uses medical marijuana tax revenue to fund free school breakfasts for students.

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 15% excise tax on cannabis retailers. The state increased the tax rate to 19% on July 1, 2025, but California lawmakers approved a bill to bring the tax back down to 15%, and Gov. Gavin Newsom signed it into law on Sept. 22, 2025. The bill sets the excise tax at 15% through July 2028.

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's revenue is allocated 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 the construction of new schools.

Connecticut's marijuana tax revenue

On June 22, 2021, Gov. Ned Lamont signed SB 1201 into law, legalizing cannabis for recreational use. Retail sales began on Jan. 10, 2023.

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. Gov. John Carney, who had previously vetoed a bill legalizing marijuana in 2022, neither signed nor vetoed the bills. Recreational marijuana sales began on Aug. 1, 2025.

How does Delaware tax marijuana?

Delaware charges a 15% sales tax on recreational marijuana sales.

How does Delaware spend marijuana tax revenue?

All marijuana tax revenue goes 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 offered marijuana as a complimentary gift with the 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.

Hawaii marijuana tax revenue

Hawaii legalized medical marijuana through the state legislature in 2000. However, sales didn't start until August 2017. Hawaii hasn't legalized recreational marijuana.

How does Hawaii tax marijuana?

Instead of a state sales tax, Hawaii charges a 4% general excise tax (GET) on all business activities, including medical marijuana sales. Four counties (Honolulu, Maui, Kauai, and Hawaii) also charge an additional 0.5% county surcharge.

How does Hawaii spend marijuana tax revenue?

Revenue from Hawaii's GET goes to a general fund that finances the state's budget.

Illinois's marijuana tax revenue

Recreational cannabis use was approved in Illinois in May 2019 when the Cannabis Regulation and Tax Act was passed under House Bill 1438. Gov. 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 Aug. 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 Oct. 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 used to pay a 10% sales tax, but the tax rate increased to 14% on Jan. 1, 2026.

How does Maine spend marijuana tax revenue?

• 12% to the 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 the recreational use of cannabis. Retail sales began on July 1, 2023.

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 cost of operations and administration 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 Nov. 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 supports 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. State lawmakers also approved a 24% wholesale tax on sales between marijuana producers and dispensaries that began on Jan. 1, 2026.

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.

Revenue from the 24% wholesale tax will fund road repairs and construction.

Minnesota's marijuana tax revenue

In May 2023, Gov. Tim Walz signed HF 100 into law, legalizing recreational marijuana. Retail sales started on Sept. 16, 2025.

How will Minnesota tax marijuana?

Adult-use cannabis sales are 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 is split 80/20 between the state and local government. Funds are used for prevention, outreach, education, and data collection.

Mississippi marijuana tax revenue

In February 2022, Gov. Tate Reeves signed SB 2095 into law, which permits the use of medical marijuana for certain debilitating medical conditions. Mississippi hasn't legalized medical marijuana.

How does Mississippi tax marijuana?

Medical marijuana cultivators are subject to a 5% excise tax on the first sale/transfer of medical marijuana. Medical cannabis dispensaries charge Mississippi's standard 7% sales tax rate at the point of sale.

How does Mississippi spend marijuana tax revenue?

Medical marijuana tax revenue in Mississippi goes into the state's general fund.

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.

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 cover 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 marijuana 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, Gov. 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 into the state general fund.

New Mexico's marijuana tax revenue

In March 2021, the New Mexico legislature passed the Cannabis Regulation Act, allowing commercial production and sales to residents 21 and older. Commercial sales began on April 1, 2022.

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.

How does New Mexico spend marijuana tax revenue?

All of New Mexico's marijuana tax revenue goes to the state's general fund.

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 Gov. 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. The table below provides marijuana tax revenue estimates based on Ohio's reported recreational marijuana sales.

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 Oct. 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, Gov. 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 retail sales data.

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. The table below provides estimated marijuana tax revenue for Vermont based on its sales and excise tax data.

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. However, Gov. Glenn Youngkin repeatedly vetoed bills to launch retail marijuana sales. Youngkin's term ends in January 2026, and Gov.-elect Abigail Spanberger has pledged to sign legislation establishing a regulated retail market. Sales are targeted to begin on Nov. 1, 2026.

How will Virginia tax marijuana?

Virginia will impose a 21% excise tax on recreational marijuana sales.

There's also a sales tax of 5.3% to 7%, depending on the locality, 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 responsible 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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Sources

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