Marijuana Tax Revenue By State Statistics [2026]

Marijuana Tax Revenue Research Summary – Marijuana legalization has expanded across many states in the US for both medical and recreational use. This once-illegal substance has transformed into a lucrative source of tax revenue for these states. Here are the key insights from our recent research on marijuana tax revenue by state:

• States that have legalized marijuana have collectively generated $15 billion in tax revenue from 2014 to 2022.

• In 2022 alone, marijuana sales produced $3.77 billion in tax revenue.

• However, marijuana tax revenue saw a decline of 2.6% between 2021 and 2022.

For a more comprehensive analysis, we have categorized the data into various aspects: Potential Tax Revenue | Tax Revenue | Per Capita | Types of Taxes | Over Time

Marijuana Tax Revenue Over Time

Marijuana Tax Revenue Statistics by Tax and Non-Tax States

Among the states that have legalized marijuana, only a few have opted not to impose taxes on its sale. Below is an overview of how the 50 states compare regarding marijuana taxation:

Tax vs. Non-Tax Legal Marijuana States

• Marijuana is legal and taxed in 19 states.

  Among these, Colorado (1.7%), Nevada (1.7%), and Washington (1.5%) have the highest share of tax revenue from marijuana.

• Marijuana is legal but not taxed in only 4 states.

  Delaware, Maryland, Minnesota, and Virginia have opted not to impose taxes on legalized marijuana.

• Marijuana remains illegal in 27 states.

  The majority of US states have yet to legalize marijuana, including:

  Alabama Arkansas Florida Georgia Hawaii Idaho Indiana Iowa Kansas	Kentucky Louisiana Mississippi Nebraska New Hampshire North Carolina North Dakota Ohio Oklahoma	Pennsylvania South Carolina South Dakota Tennessee Texas Utah West Virginia Wisconsin Wyoming

Marijuana Tax Revenue Statistics by Potential Tax Revenue

States that have legalized marijuana have already seen impressive tax revenue, with even more potential for states yet to embrace legalization. Below are some facts about potential revenues for each state:

Potential Marijuana Tax Revenue by State (for a Minimum of Three Years)

• California stands to earn the most potential tax revenue from marijuana at $1.086 billion. With the largest population in the US, California can generate substantial profits from marijuana taxes, followed by Florida and New York.

• Florida could gain $448.74 million in marijuana taxes if legalized. Other states like Texas and Pennsylvania also have significant potential, with estimated earnings of $397.42M and $244.55M, respectively.

• Wyoming has the least potential tax revenue from marijuana at only $10.05 million. Smaller populations tend to yield lower profits from marijuana taxes, similar to North Dakota and South Dakota.

Marijuana Tax Revenue Earned in 2022

The marijuana tax revenue for 2022 was substantial for the states with legalized marijuana. Below are the figures:

Marijuana Tax Revenue by State (2022)

• California earned the highest tax revenue from marijuana in 2022, totaling $1.074 billion. Other top states include Illinois ($562.12M), Washington ($529.44M), Michigan ($326.05M), and Colorado ($305.03M).

• Rhode Island earned the least from marijuana taxes, at only $579,439. However, since Rhode Island legalized marijuana on May 25, 2022, its tax revenue is expected to rise significantly in subsequent years.

Marijuana Tax Revenue Statistics by Tax Revenue Per Capita

Marijuana tax revenue per capita provides insight into which states generate the most revenue from marijuana taxes relative to their population. Below is a detailed chart outlining state revenue per capita:

Marijuana Tax Revenue Per Capita by State

• Washington state boasts the highest per capita marijuana tax revenue of $67. Colorado follows closely with $61 per person.

• Maine has the lowest per capita revenue from marijuana taxes, at only $13. Along with Michigan ($16) and Arizona ($18), it ranks among the states earning less than $20 per capita from marijuana taxes.

Marijuana Tax Revenue Statistics by Types of Taxes

Marijuana taxes vary from state to state for several reasons. Some states impose general state taxes, while others may opt for weight-based taxation. Below are the differences in marijuana taxation across states:

Type of Marijuana Taxes by State

• 17 states have state percentage-of-price taxes.

  This is the most prevalent type of marijuana tax, while 12 states impose local percentage-of-price taxes. Notably, California, Illinois, Massachusetts, Missouri, Montana, New York, Oregon, Rhode Island, and Virginia have adopted both types.

• Only 5 states implement weight-based marijuana taxes.

  These states include Alaska, Colorado, Maine, Nevada, and New Jersey, which tax marijuana based on its weight.

• Only 3 states impose potency-based marijuana taxes.

  Connecticut, Illinois, and New York have chosen to impose taxes based on marijuana’s potency.

• 14 states have state general sales taxes for marijuana.

  Additionally, 11 states have local general sales taxes for marijuana. States that impose both state and local general sales taxes include Arizona, California, Illinois, Missouri, Nevada, New Mexico, Vermont, Virginia, and Washington.

Marijuana Tax Revenue Statistics by Tax Revenue Over Time

Since marijuana was legalized in some states much earlier than others, these states have had more time to accumulate tax revenue. Below is the total revenue accumulated by states over time:

Marijuana Tax Revenue by State Over Time

• California has generated the most from marijuana taxes since legalization, totaling $4.660 billion. Although Colorado was the first state to legalize marijuana, it ranks third in total revenue, following California and Washington.

• Montana, despite legalizing marijuana only in 2022, has already accumulated $45.73 million in tax revenue. This is particularly noteworthy given Montana’s small population. Rhode Island, which also legalized marijuana in 2022, has seen lower revenue due to its recent implementation.

Marijuana Tax Revenue FAQ

1. Which state generates the most revenue from marijuana?

   California leads in marijuana revenue, earning $1.074 billion in 2022 and $4.660 billion since legalization. This significant figure is partly due to California’s large population and high marijuana taxes. However, on a per capita basis, Washington and Colorado outperform California, generating $67 and $61 per person, respectively.

2. How much money do states earn from marijuana taxes?

   States’ earnings from marijuana taxes range from a few million to over a billion annually. Smaller states such as Alaska, Maine, Montana, New Jersey, New Mexico, and Vermont earned less than $100 million in 2022. In contrast, larger states like California, Illinois, and Washington surpassed $500 million in tax revenue.

   States that have generated more revenue often have larger populations or legalized marijuana earlier. For example, Colorado has amassed over $2 billion since legalizing marijuana in 2014, while Rhode Island, which legalized in 2022, has only earned $579,439 to date.

3. What is the use of marijuana tax revenue?

   Marijuana taxes typically fund designated state programs. States can allocate these funds to various initiatives, including:

   • Health care
   • Education
   • Substance abuse prevention
   • Treatment programs
   • Law enforcement
   • Veterans programs
   • Transportation
   • Social services
   • Natural resource management

   Each state prioritizes spending differently. For instance, California primarily channels its marijuana tax revenue into transportation, education, and social services, whereas Missouri allocates its funds toward public defense, drug addiction treatment, and veterans’ services.

4. Do marijuana growers pay federal taxes?

   Yes, marijuana growers are required to pay federal taxes. Despite marijuana’s federal illegal status, growers must comply with federal tax laws and pay income tax on sales from their dispensaries, treating marijuana income like any other source of income.

5. What would be the financial impact if marijuana were legalized nationwide?

   If marijuana were legalized federally, it could generate an estimated $132 billion in tax revenue. This figure exceeds the annual revenue generated by alcohol (over $10 billion) and could create over a million jobs in the next decade.

Conclusion

Marijuana tax revenue has reached an impressive $15 billion in the US and is expected to grow as more states legalize the substance.

California remains the leader in marijuana tax revenue, generating $1.074 billion in 2022 and $4.660 billion since its legalization. While Colorado and Washington excel in per capita revenue, they still trail behind California in total tax earnings.

Looking ahead, states like Florida, Texas, and Pennsylvania could see significant benefits from marijuana taxes, but their decisions to legalize the substance will shape future revenue potential.

References

1. Marijuana Moment – States Have Generated Over $15 Billion In Marijuana Tax Revenue Since 2014, Though Earnings Declined Last Year, Report Finds

2. Urban Institute – Cannabis Taxes

3. Tax Foundation – Several States Considering Legal Recreational Marijuana

4. The Motley Fool – Marijuana Tax Revenue: A State-by-State Breakdown

Author

Jack Flynn

Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.