December 23, 2020

How Is Recreational Cannabis Taxed in Your State?

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.