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Where cannabis is supporting tax revenue the most
Cannabis raked in $2.9 billion in state tax revenues in 2023, according to Census Bureau data, even as it remains illegal at a federal level.
These contributions could escalate further if the federal government loosens restrictions on marijuana, which reports say could be in the works. The Washington Post reported that Attorney General Merrick Garland plans to recommend cannabis be reclassified from a Schedule I controlled substance—where it currently rates alongside drugs such as heroin and LSD—to a Schedule III drug, allowing it to be prescribed and sold with restrictions.
Despite federal regulations, marijuana is fully legal for medical and recreational use in 23 states and Washington D.C., with many others allowing its use on some level. Stacker analyzed Census Bureau data to identify where in the United States cannabis tax revenues have the highest impact.
Stacker ranked states by cannabis excise sales taxes as a percentage of general sales and gross receipts taxes in the fourth quarter of 2023. The analysis also presents information on per capita cannabis tax revenues and the state’s cannabis legalization status, though these don’t factor into the ranking. Only the 23 states with recorded cannabis tax incomes were included in the analysis, and two were unranked, as data on general sales tax incomes were unavailable.
Where legalized and taxed, marijuana is already a major contributor to local economies. Cannabis—alongside other “sin tax” items like alcohol—is typically taxed at a higher rate to fund solutions for the negative consequences of its use or history. That means it has the potential to bring in a supersized portion of tax revenues, with some earmarked for substance use disorder education or prevention and reinvestment in communities that were disproportionately harmed by the War on Drugs.
Read on to see how much tax revenue cannabis generates in your state.
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Unranked: Alaska
– Cannabis’s share of general sales/gross receipts tax revenue: Not available
– Total cannabis excise sales tax revenue, Q4 2023: $7.0 million ($9.59 per resident)
– Legal status: Fully legal
– Year of legalization: 2014
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Unranked: Montana
– Cannabis’s share of general sales/gross receipts tax revenue: Not available
– Total cannabis excise sales tax revenue, Q4 2023: $13.4 million ($11.84 per resident)
– Legal status: Fully legal
– Year of legalization: 2020
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#21. Louisiana
– Cannabis’s share of general sales/gross receipts tax revenue: 0.02%
– Total cannabis excise sales tax revenue, Q4 2023: $239,000 ($0.05 per resident)
– Legal status: Decriminalized and medical use allowed
– Year of legalization: 2015 (decriminalized in 2021)
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#20. Mississippi
– Cannabis’s share of general sales/gross receipts tax revenue: 0.03%
– Total cannabis excise sales tax revenue, Q4 2023: $334,000 ($0.11 per resident)
– Legal status: CBD with THC Only
– Year of legalization: 2014 (decriminalized in 1978)
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#19. Washington DC
– Cannabis’s share of general sales/gross receipts tax revenue: 0.06%
– Total cannabis excise sales tax revenue, Q4 2023: $301,000 ($0.44 per resident)
– Legal status: Fully legal
– Year of legalization: 2014
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#18. Pennsylvania
– Cannabis’s share of general sales/gross receipts tax revenue: 0.22%
– Total cannabis excise sales tax revenue, Q4 2023: $8.7 million ($0.67 per resident)
– Legal status: Medical use only
– Year of legalization: 2016
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#17. Rhode Island
– Cannabis’s share of general sales/gross receipts tax revenue: 0.28%
– Total cannabis excise sales tax revenue, Q4 2023: $1.2 million ($1.06 per resident)
– Legal status: Fully legal
– Year of legalization: 2022
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#16. Arkansas
– Cannabis’s share of general sales/gross receipts tax revenue: 0.29%
– Total cannabis excise sales tax revenue, Q4 2023: $3.7 million ($1.19 per resident)
– Legal status: Medical use only
– Year of legalization: 2016
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#15. New York
– Cannabis’s share of general sales/gross receipts tax revenue: 0.29%
– Total cannabis excise sales tax revenue, Q4 2023: $14.8 million ($0.76 per resident)
– Legal status: Fully legal
– Year of legalization: 2021
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#14. New Jersey
– Cannabis’s share of general sales/gross receipts tax revenue: 0.30%
– Total cannabis excise sales tax revenue, Q4 2023: $9.8 million ($1.05 per resident)
– Legal status: Fully legal
– Year of legalization: 2020
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#13. Connecticut
– Cannabis’s share of general sales/gross receipts tax revenue: 0.58%
– Total cannabis excise sales tax revenue, Q4 2023: $9.0 million ($2.50 per resident)
– Legal status: Fully legal
– Year of legalization: 2021
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#12. California
– Cannabis’s share of general sales/gross receipts tax revenue: 1.18%
– Total cannabis excise sales tax revenue, Q4 2023: $160.7 million ($4.12 per resident)
– Legal status: Fully legal
– Year of legalization: 2016
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#11. Oklahoma
– Cannabis’s share of general sales/gross receipts tax revenue: 1.26%
– Total cannabis excise sales tax revenue, Q4 2023: $12.2 million ($3.00 per resident)
– Legal status: Medical use only
– Year of legalization: 2015
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#10. Missouri
– Cannabis’s share of general sales/gross receipts tax revenue: 1.42%
– Total cannabis excise sales tax revenue, Q4 2023: $18.1 million ($2.92 per resident)
– Legal status: Fully legal
– Year of legalization: 2023 (decriminalized in 2014)
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#9. Arizona
– Cannabis’s share of general sales/gross receipts tax revenue: 1.54%
– Total cannabis excise sales tax revenue, Q4 2023: $44.2 million ($5.95 per resident)
– Legal status: Fully legal
– Year of legalization: 2020
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#8. Maine
– Cannabis’s share of general sales/gross receipts tax revenue: 1.62%
– Total cannabis excise sales tax revenue, Q4 2023: $9.5 million ($6.81 per resident)
– Legal status: Fully legal
– Year of legalization: 2016
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#7. Illinois
– Cannabis’s share of general sales/gross receipts tax revenue: 1.71%
– Total cannabis excise sales tax revenue, Q4 2023: $69.1 million ($5.51 per resident)
– Legal status: Fully legal
– Year of legalization: 2019
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#6. Massachusetts
– Cannabis’s share of general sales/gross receipts tax revenue: 1.84%
– Total cannabis excise sales tax revenue, Q4 2023: $44.1 million ($6.30 per resident)
– Legal status: Fully legal
– Year of legalization: 2016
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#5. Washington
– Cannabis’s share of general sales/gross receipts tax revenue: 1.96%
– Total cannabis excise sales tax revenue, Q4 2023: $113.4 million ($14.51 per resident)
– Legal status: Fully legal
– Year of legalization: 2012
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#4. Michigan
– Cannabis’s share of general sales/gross receipts tax revenue: 2.34%
– Total cannabis excise sales tax revenue, Q4 2023: $73.6 million ($7.33 per resident)
– Legal status: Fully legal
– Year of legalization: 2018
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#3. Vermont
– Cannabis’s share of general sales/gross receipts tax revenue: 2.62%
– Total cannabis excise sales tax revenue, Q4 2023: $4.0 million ($6.14 per resident)
– Legal status: Fully legal
– Year of legalization: 2020
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#2. Colorado
– Cannabis’s share of general sales/gross receipts tax revenue: 5.26%
– Total cannabis excise sales tax revenue, Q4 2023: $61.0 million ($10.37 per resident)
– Legal status: Fully legal
– Year of legalization: 2012
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#1. Oregon
– Cannabis’s share of general sales/gross receipts tax revenue: 11.43%
– Total cannabis excise sales tax revenue, Q4 2023: $35.9 million ($8.47 per resident)
– Legal status: Fully legal
– Year of legalization: 2014
Story editing by Nicole Caldwell. Copy editing by Paris Close.
