More and more states are finding recreational marijuana sales can boost their coffers. Since 2014, states with legal pot laws on the books have generated $8 billion in cannabis sales taxes, the Marijuana Policy Project estimates.
Just in 2020, taxes from adult recreational cannabis sales totaled $2.7 billion — a number sure to increase as more states decide to get in on the buzzy market of legal marijuana, MPP reports. California’s tax revenues from cannabis sales soared to $1 billion in 2020, a 62% hike from 2019. MPP projects that Illinois could hit $1 billion in tax revenues this year, too. Of course, this could depend on how many smokers are per state. This state smokes the most pot: ranking use by state.
To determine how much money states made from marijuana in 2020, 24/7 Wall St. concentrated on legal state-level sales tax revenue collected by the Mariuana Policy Project’s 2021 report, “Marijuana Tax Revenue in States that Regulate Marijuana for Adult Use.” This estimate does not include local sales tax revenue.
Once those taxes are collected, each state earmarks those dollars for specific programs. For example, according to the think tank the Urban Institute, Arizona spreads its taxes from marijuana sales between its community colleges, law enforcement, fire departments, and its highways. Colorado directs the tax revenues to educational programs, as do Oregon and Vermont. Ironically, some states, like California and Connecticut, push those funds into drug recovery initiatives.
Would-be cannabis entrepreneurs should be warned that setting up shop won’t be easy. Marijuana is still considered a controlled substance by the federal government, so it’s up to the states to formulate the laws governing sales and tax collections. And states have strict guidelines on licensing, what products can be sold, and