On the Map Cannabis Taxes

Fifteen states have legalized the sale of cannabis for general adult use and sales are already underway in 10 of those states. Every state allowing legal sales applies an excise tax to cannabis based on the product’s weight, its price, or both. ITEP research indicates that taxes based on weight will be more sustainable over time because prices are widely expected to fall as the cannabis industry matures. Most states allowing for legal cannabis sales apply their general sales taxes to the product and local sales taxes also typically apply where such taxes exist.

Seven states currently allow for the legal, taxable sale of recreational cannabis. The above map shows per capita revenue collections from excise and sales taxes on cannabis during the second quarter of 2019, the most recent period for which data are available in every state. The most lucrative cannabis market in the country, from a tax revenue perspective, is in Washington State where the 46 percent combined tax rate applied to cannabis is the highest in the country. Collections in California and Massachusetts, by contrast, remain low as these states are still in the early stages of establishing their legal markets. ITEP has issued in-depth analyses of cannabis taxes in general and of California’s market in particular.