States are making bank off weed taxes

States with legal cannabis sales have been able to generate billions in revenue from taxes, which in turn supports nonprofits and initiatives.

All that staying home was apparently good for the weed industry. In 2020, US cannabis sales hit a record $17.5B, per Forbes.

States are making bank off weed taxes

But a new report from the Marijuana Policy Project found that states are also profiting.

The 18 states that have legalized recreational cannabis have raked in $10.4B in tax revenue since 2014. A few examples:

  • Colorado, which kicked off legal adult-use sales in 2014, has collected $1.79B.
  • Alaska (2016) has generated $95m.
  • California (2018) — the largest state by population — has collected $3.1B.

The report does not include local tax revenues…

… but cities pull in money, too.

Denver has generated $237.5m.

California’s West Hollywood sees itself as a future Amsterdam. It currently has 6 dispensaries in 1.8 square miles, generating $2.2m a year.

Where does the money go?

Every state is different, but many support schools, infrastructure, or nonprofits.

For example, Colorado splits its money among funds including the Building Excellent Schools Today (BEST) Fund. Since 2014, it has received $325m+ in excise taxes.

California has given ~$100m to organizations that work with communities harmed by the war on drugs, per AP News.

Michigan generated $45.7m in 2020 from excise taxes and fees, which it splits between its School Aid Fund, the Michigan Transportation Fund, municipalities and counties, and admin costs.

Fun fact: A 2021 study from the Pew Research Center found that only 8% of US adults think cannabis should be illegal, while 31% are cool with medical use and 60% are fine with recreational use, too.

New call-to-action
Topics: Regulation

Related Articles

Get the 5-minute news brief keeping 2.5M+ innovators in the loop. Always free. 100% fresh. No bullsh*t.