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.

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Marijuana Tax Revenue by State

Marijuana can bring in big bucks for state governments.

By Lyle Daly – Updated Sep 8, 2026 at 9:15 PM EST | Fact-checked by Frank Bass

+Fool.comon

Key Points

States accrued over $27 billion from medical and recreational marijuana taxes.
Cannabis tax rates range 4% to 37%, with additional local taxes in many states.
Revenue uses include education, healthcare, infrastructure, and social equity programs.

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

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Data source: Alaska Department of Revenue (2026).

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Data source: Arizona Department of Revenue (2026).

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Data source: Media reports.

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Data source: California Department of Tax and Fee Administration (2026).

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Data source: Colorado Department of Revenue (2026).

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Data source: Connecticut State Department of Revenue Services (2026).

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Data source: State of Hawaii Department of Health (2026).

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Data source: Illinois Department of Revenue (2026).

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Data source: Louisiana Department of Revenue (2026).

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Data source: Maine Department of Administrative and Financial Services (2026).

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Data source: Maryland Cannabis Administration (2026).

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Data source: Massachusetts Office of the Comptroller (2026).

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Data source: Michigan Department of Treasury (2026).

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Data source: Mississippi Department of Revenue (2026).

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Data source: Missouri Department of Revenue (2026).

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Data source: Montana Department of Revenue (2026).

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Data source: Nevada Department of Taxation (2026).

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Data source: New Jersey Cannabis Regulatory Commission (2026).

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Data source: New Mexico Regulation & Licensing Department (2026).

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Data source: New York State Office of Cannabis Management (2026).

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Data source: Ohio Department of Commerce Division of Cannabis Control (2026).

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Data source: Oklahoma Tax Commission (2026).

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Data source: Oregon Department of Revenue (2026).

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Data source: State of Rhode Island Division of Taxation (2026).

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Data source: Vermont Department of Taxation (2026).

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Data source: Washington State Liquor and Cannabis Board (2026).

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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

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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.

Marijuana Tax Revenue by State

Marijuana can bring in big bucks for state governments.

Key Points

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?

Sources

About the Author

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Revenue

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?

Sources