How do state taxes on marijuana work?

States impose excise taxes on marijuana sales. Taxes can be based on sale price, potency, or weight.

How do states use marijuana tax revenue?

States use revenue from marijuana to support a range of programs, including education, infrastructure, remedies for harm from enforcement of previous drug policies, and drug harm reduction.

Marijuana Tax Revenue by State

Marijuana can bring in big bucks for state governments.

By Lyle Daly – Updated May 20, 2026 at 1:11 PM EST | Fact-checked by Frank Bass

Key Points

California generates over $1 billion annually in marijuana tax revenue.
States use cannabis taxes for education, public safety, and health services.
Legalization of recreational marijuana significantly boosts state tax revenues.

Infographic displaying the legalization status of marijuana in the US and Puerto Rico — Image source: The Motley Fool

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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 cannabis companies and state budgets. California now regularly rakes in more than $1 billion in marijuana tax revenue each year. Many other states with thriving markets generate hundreds of millions of dollars per year. Combined, states have reported more than $26 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.

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Revenue

Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.

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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. The total tax collected varies depending on the state's population, the duration of the program, and the method of taxation.

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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:

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Marijuana tax rates by state

Most states tax marijuana as a percentage of the retail price, but rates range from 4% in Hawaii to 37% in Washington. Many states also add standard sales taxes on top of these rates, and several apply lower rates to medical marijuana than to recreational-use sales. The table below summarizes how states tax marijuana, where it's legal to sell.

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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.

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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.

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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 comes from the most recent reports available as of June 2026.

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State-by-state revenue breakdown

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.

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Data source: Alaska Department of Revenue (2026).
FISCAL YEAR	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
2022	$28,690,918
2023	$29,477,517
2024	$27,251,831
2025	$25,712,480

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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.

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Data source: Arizona Department of Revenue (2026).
FISCAL YEAR	ARIZONA STATE MARIJUANA TAX REVENUE
2021	$74,386,952
2022	$255,997,918
2023	$283,179,058
2024	$289,879,253
2025	$283,565,186
2026 (July-April)	$229,779,855

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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.

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Data source: Media reports.
FISCAL YEAR	ARKANSAS STATE MARIJUANA TAX REVENUE
2019	$2,900,000
2020	$21,200,000
2021	$33,100,000
2022	$32,000,000
2023	$31,089,000
2024	$31,170,000
2025	$32,300,000

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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.

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Data source: California Department of Tax and Fee Administration (2026).
YEAR	CALIFORNIA STATE MARIJUANA TAX REVENUE
2018	$401,278,068
2019	$646,100,976
2020	$1,134,356,952
2021	$1,360,456,236
2022	$1,115,637,644
2023	$1,096,790,406
2024	$1,067,103,932
2025	$1,052,477,846
2026 (January-March)	$247,916,069

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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.

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Data source: Colorado Department of Revenue (2026).
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
2022	$325,103,684
2023	$274,121,043
2024	$255,360,702
2025	$236,449,405
2026 (January-March)	$56,181,955

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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.

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Data source: Connecticut State Department of Revenue Services (2026).
FISCAL YEAR	CONNECTICUT STATE MARIJUANA TAX REVENUE
2023	$4,675,642
2024	$20,509,089
2025	$22,657,073

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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. Former Gov. John Carney, who had previously vetoed a 2022 bill legalizing marijuana, 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 for projects that improve the quality of life for communities most impacted by marijuana prohibition. After covering administrative costs, the legislature will decide how to allocate the remaining 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's 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.

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Data source: State of Hawaii Department of Health (2025).
YEAR	HAWAII STATE MARIJUANA TAX REVENUE
2017	$99,871
2018	$572,170
2019	$1,201,168
2020	$2,023,138
2021	$2,568,947
2022	$2,428,035
2023	$2,588,588
2024	$2,937,877
2025	$2,828,019

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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 is deposited into 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.

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Data source: Illinois Department of Revenue (2026).
FISCAL YEAR	ILLINOIS STATE MARIJUANA TAX REVENUE
2020	$52,783,471
2021	$317,074,562
2022	$466,816,883
2023	$451,868,765
2024	$457,284,195
2025	$474,058,705

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How does Illinois tax marijuana?

Illinois charges a 7% wholesale tax on the value of cannabis products. 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 governments.
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.

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Data source: Louisiana Department of Revenue (2026).
FISCAL YEAR	LOUISIANA STATE MARIJUANA TAX REVENUE
2020	$76,794
2021	$286,963
2022	$1,066,243
2023	$2,309,603
2024	$3,602,620
2025	$6,362,786

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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; its reports on medical marijuana taxes are based on the fiscal year, which runs from July 1 through June 30.

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Data source: Maine Department of Administrative and Financial Services (2026).
YEAR	MAINE ADULT-USE MARIJUANA TAX REVENUE (CALENDAR YEAR)	MAINE MEDICAL MARIJUANA TAX REVENUE (FISCAL YEAR)
2018	N/A	$2,444,918
2019	N/A	$2,597,338
2020	$1,156,878	$3,969,914
2021	$12,362,620	$6,592,228
2022	$25,329,536	$3,319,473
2023	$33,573,220	$2,913,410
2024	$38,692,976	$2,257,962
2025	$42,200,295	$2,519,699

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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 for adult-use marijuana, but the tax rate increased to 14% on Jan. 1, 2026. The tax rate for medical marijuana remains 5.5% for non-edibles and 8% for edibles.

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.

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Data source: Maryland Cannabis Administration (2026).
YEAR	MARYLAND STATE MARIJUANA TAX REVENUE
2023	$26,734,752
2024	$72,934,285
2025	$90,396,741

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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 the Maryland Cannabis Administration's operations and 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

Massachusetts approved recreational marijuana use 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 2018.

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Data source: Massachusetts Office of the Comptroller (2026).
FISCAL YEAR	MASSACHUSETTS STATE MARIJUANA TAX REVENUE
2019	$22,058,544
2020	$81,734,083
2021	$176,731,045
2022	$248,987,059
2023	$255,007,368
2024	$272,445,292
2025	$289,463,118
2026 (July-December)	$147,095,428

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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.

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Michigan's marijuana tax revenue

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

Data source: Michigan Department of Treasury (2025).
FISCAL YEAR	MICHIGAN STATE MARIJUANA TAX REVENUE
2020	$17,900,000
2021	$101,747,000
2022	$169,502,000
2023	$255,345,000
2024	$303,955,000

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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's 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.

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Data source: Mississippi Department of Revenue (2026).
FISCAL YEAR	MISSISSIPPI STATE MARIJUANA TAX REVENUE
2023	$8,012,198
2024	$7,550,797
2025	$7,394,558

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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.

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Data source: Missouri Department of Revenue (2026).
FISCAL YEAR	MISSOURI STATE MARIJUANA TAX REVENUE
2021	$2,024,672
2022	$10,778,767
2023	$36,035,800
2024	$78,029,105
2025	$87,972,403

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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.

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Data source: Montana Department of Revenue (2026).
YEAR	MONTANA STATE MARIJUANA TAX REVENUE
2022	$45,734,127
2023	$54,075,570
2024	$57,387,810
2025	$59,373,394
2026 (January-May)	$24,626,902

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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.

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Data source: Nevada Department of Taxation (2026).
FISCAL YEAR	NEVADA STATE MARIJUANA TAX REVENUE
2018	$69,852,548
2019	$99,389,615
2020	$105,208,027
2021	$157,751,744
2022	$152,337,447
2023	$133,091,552
2024	$120,537,777
2025	$111,849,708
2026 (July-March)	$77,352,744

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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 into the state's rainy-day fund. Revenue from the wholesale tax helps cover expenses and boost the rainy fund.

New Jersey's marijuana tax revenue

In February 2021, former 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.

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Data source: New Jersey Cannabis Regulatory Commission (2026).
YEAR	NEW JERSEY STATE MARIJUANA TAX REVENUE
2022	$20,139,655
2023	$41,889,891
2024	$61,019,060
2025	$67,509,470

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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.

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Data source: New Mexico Regulation & Licensing Department (2026).
YEAR	NEW MEXICO STATE MARIJUANA TAX REVENUE
2023	$47,243,651
2024	$53,594,444
2025	$54,429,452
2026 (January-May)	$24,155,113.00

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How does New Mexico tax marijuana?

New Mexico imposes an excise tax on recreational cannabis. The excise tax rate was 12% for sales before 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?

Two-thirds of New Mexico's marijuana tax revenue goes to the state's general fund and one-third goes to local governments.

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 former Gov. Andrew Cuomo in March 2021. Retail sales started on Dec. 29, 2022.

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Data source: New York State Office of Cannabis Management (2026).
FISCAL YEAR	NEW YORK STATE MARIJUANA TAX REVENUE
2017	$585,000
2018	$1,881,000
2019	$3,867,000
2020	$5,698,000
2021	$8,411,000
2022	$12,909,000
2023	$12,852,000
2024	$50,760,000
2025	$158,423,000
2026	$264,238,000
2027 (April)	$5,795,000

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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.

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Data source: Ohio Department of Commerce Division of Cannabis Control (2026).
FISCAL YEAR	OHIO MARIJUANA TAX REVENUE
2025	$55,600,000

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How does Ohio tax marijuana?

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

How does Ohio spend marijuana tax revenue?

Ohio allocates its marijuana tax revenue on a quarterly basis as follows:

64% to the general fund
36% to the Host Community Cannabis Fund to benefit municipal corporations and/or townships with adult-use dispensaries

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.

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Data source: Oklahoma Tax Commission (2026).
FISCAL YEAR	OKLAHOMA STATE MARIJUANA TAX REVENUE
2019	$6,832,091
2020	$42,409,066
2021	$66,098,861
2022	$60,215,242
2023	$51,916,562
2024	$51,013,447
2025	$47,519,667

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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 2016.

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Data source: Oregon Department of Revenue (2026).
FISCAL YEAR	OREGON STATE MARIJUANA TAX REVENUE
2016	$20,652,983
2017	$70,263,897
2018	$82,203,729
2019	$102,094,948
2020	$133,150,349
2021	$178,262,488
2022	$170,572,100
2023	$142,088,093
2024	$150,898,047
2025	$147,521,285
2026 (July-April)	$118,430,571

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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.

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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.

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Data source: State of Rhode Island Division of Taxation (2026).
YEAR	RHODE ISLAND STATE MARIJUANA TAX REVENUE
2022	$1,040,091
2023	$17,203,431
2024	$20,514,483
2025	$21,642,531
2026 (January-May)	$9,295,313

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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.

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Data source: Vermont Department of Taxation (2026).
YEAR	VERMONT STATE MARIJUANA TAX REVENUE
2022	$2,364,170
2023	$21,720,595
2024	$27,842,873
2025	$29,663,047
2026 (January-March)	$7,461,019

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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, but bills to launch retail marijuana sales were repeatedly vetoed. Gov. Abigail Spanberger, whose term began in January 2026, has pledged to sign legislation establishing a regulated retail market. Sales are targeted to begin on Jan. 1, 2027.

How will Virginia tax marijuana?

Virginia will impose a 6% excise tax on recreational marijuana sales. Localities can impose a local tax of 1% to 3.5%. 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.

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Data source: Washington State Liquor and Cannabis Board (2026).
FISCAL YEAR	WASHINGTON STATE MARIJUANA TAX REVENUE
2015	$64,630,000
2016	$186,000,000
2017	$315,200,000
2018	$362,000,000
2019	$390,400,000
2020	$469,159,137
2021	$555,412,310
2022	$511,123,712
2023	$464,496,959
2024	$454,742,324
2025	$438,413,557

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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.

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?

After a period of explosive growth, the marijuana market has slowed down. Several states with mature adult-use marijuana markets, including Arizona, California, Oregon, and Washington, have seen tax revenues decline. Total marijuana tax revenue in the U.S. is still trending upward, though, as more states legalize it and get their markets operational.

The marijuana industry also got some long-awaited good news on Dec. 18, 2025, when President Trump signed an executive order to expedite the reclassification of marijuana from a Schedule I drug to a Schedule III substance. The reclassification should open up federal income tax deductions that weren't previously available to business owners.

It remains unlikely that we'll see results similar to those of 2020 and 2021, when tax revenue increased by about $1 billion per year and cannabis ETFs and stocks were soaring. But there are still 26 states that haven't legalized recreational marijuana yet, giving the industry ample opportunity for more expansion.

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FAQs

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

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@LyleDaly

The Motley Fool has a disclosure policy.

Marijuana Tax Revenue by State

Marijuana can bring in big bucks for state governments.

Key Points

Revenue

Marijuana tax revenue by state

Marijuana tax rates by state

Medical marijuana tax collection

Total tax collections by state

Total marijuana tax revenue collected by year

State-by-state revenue breakdown

Alaska's marijuana tax revenue

Arizona's marijuana tax revenue

Arkansas's marijuana tax revenue

California's marijuana tax revenue

Colorado's marijuana tax revenue

Connecticut's marijuana tax revenue

Delaware's marijuana tax revenue

District of Columbia's marijuana tax revenue

Hawaii's marijuana tax revenue

Illinois's marijuana tax revenue

Louisiana's marijuana tax revenue

Maine's marijuana tax revenue

Maryland's marijuana tax revenue

Massachusetts's marijuana tax revenue

Michigan's marijuana tax revenue

Minnesota's marijuana tax revenue

Mississippi's marijuana tax revenue

Missouri's marijuana tax revenue

Montana's marijuana tax revenue

Nevada's marijuana tax revenue

New Jersey's marijuana tax revenue

New Mexico's marijuana tax revenue

New York's marijuana tax revenue

Ohio's marijuana tax revenue

Oklahoma's marijuana tax revenue

Oregon's marijuana tax revenue

Rhode Island's marijuana tax revenue

Vermont's marijuana tax revenue

Virginia's marijuana tax revenue

Washington's marijuana tax revenue

The status of marijuana legalization around the United States

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Will the marijuana market continue to grow?

FAQs

How do state taxes on marijuana work?

How do state taxes on marijuana work?

How do states use marijuana tax revenue?

How do states use marijuana tax revenue?

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Revenue

Marijuana tax revenue by state

Marijuana tax rates by state

Medical marijuana tax collection

Total tax collections by state

Total marijuana tax revenue collected by year

State-by-state revenue breakdown

Alaska's marijuana tax revenue

Arizona's marijuana tax revenue

Arkansas's marijuana tax revenue

California's marijuana tax revenue

Colorado's marijuana tax revenue

Connecticut's marijuana tax revenue

Delaware's marijuana tax revenue

District of Columbia's marijuana tax revenue

Hawaii's marijuana tax revenue

Illinois's marijuana tax revenue

Louisiana's marijuana tax revenue

Maine's marijuana tax revenue

Maryland's marijuana tax revenue

Massachusetts's marijuana tax revenue

Minnesota's marijuana tax revenue

Mississippi's marijuana tax revenue

Missouri's marijuana tax revenue