The legal cannabis industry generated $3.7 billion in US tax revenue in 2021

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Since 2014, when sales began in Colorado and Washington, legalization policies have provided US states with a new source of revenue. In March 2022, states reported a combined total of $11.2 billion in tax revenue from legal adult cannabis sales since 2014.

In 2021 alone, US states that legalized cannabis generated more than $3.7 billion in tax revenue from cannabis sales for adult use. In addition to revenue generated for state budgets, cities and towns have also generated hundreds of thousands of dollars in new revenue from local adult cannabis taxes.

Cannabis taxes in the United States

Canada has generated CA$15 billion in taxes since legalization in 2018.

18 US states have legalized since 2014

18 US states now have laws that legalize, tax and regulate cannabis for adults 21 and older. Eight of those laws were approved in 2020 or 2021, and in six of those states sales and tax collections have yet to begin.

A recent report from Marijuana Policy Projectthe largest of the organizations working on cannabis law reform in the United States, reviews the different recreational cannabis tax structures for each US state.

“Our report is further evidence that ending cannabis prohibition has enormous financial benefits for state governments. The legalization and regulation of cannabis for adults has generated billions of dollars in tax revenue, funded important state-level services and programs, and created thousands of jobs across the country. Meanwhile, states that are lagging behind continue to waste public money enforcing archaic cannabis laws that hurt far too many Americans,” said Toi Hutchinson, president and CEO of the Marijuana Policy Projectin a press release.

In states where the sale of cannabis for adult use is legal, tax revenue can be used for social services and programs. This includes funding for education, school building, early literacy, public libraries, bullying prevention, behavioral health, alcohol and drug treatment, veterans services, conservation, job training, expungement of convictions, and reinvestment in communities disproportionately impacted by the war on drugs.

A dozen more states could legalize recreational cannabis in 2022, including Maryland, Missouri, Ohio, Rhode Island and South Dakota.

The figures in brief

2021 State Totals:

  • Alaska: $28,900,231
  • Arizona: $153,824,757
  • California: $1,294,632,799
  • Colorado: $396,157,005
  • Illinois: $424,206,703
  • Maine: $12,362,622
  • Massachusetts: $227,474,842
  • Michigan: $209,912,278
  • Nevada: $159,885,501
  • Oregon: $177,773,944
  • Washington: $630,863,570

Year-over-year totals:

  • 2014: $68,503,980
  • 2015: $264,211,871
  • 2016: $530,521,110
  • 2017: $723,145,481
  • 2018: $1,275,483,830
  • 2019: $1,707,204,090
  • 2020: $2,766,027,570
  • 2021: $3,715,994,252

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