Analysis: Adult-Use Cannabis Markets Generate Over $20 Billion in State Tax Revenue

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Taxes derived from the licensed sale of state-regulated cannabis products totaled more than $4 billion in 2023, according to an analysis provided by the Marijuana Policy Project.

MPP’s estimates do not include revenues derived from the sale of medical cannabis products or from the collection of state-imposed regulatory fees.

Cannabis sales generated the greatest amount of tax revenue in California (nearly $1.1 billion), followed by Illinois, Washington, and Michigan.

Since 2014, retail sales of adult-use cannabis products have generated more than $20 billion in state tax revenue.

“In many states with legal, adult-use cannabis sales, tax revenues are allocated for social services and programs,” the report’s authors acknowledged. “This includes funding education, school construction, early literacy, public libraries, bullying prevention, behavioral health, alcohol and drug treatment, veterans’ services, conservation, job training, conviction expungement expenses, and reinvestment in communities that have been disproportionately affected by the war on cannabis, among many others.”

Separate economic data published in April reported that the state-licensed cannabis industry added over 23,000 new jobs in 2023 and employs over 440,000 full-time workers.

Full text of the report, “Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use,” is available from MPP. Additional information is available from the NORML Fact Sheet, ‘Marijuana regulation: Impact on Health, Safety, Economy.’

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