Banking & Finance

Cannabis Tax Revenues Have Brought In $8B Since The Beginning Of Legalization

Cannabis Tax Revenues Have Brought In $8B Since The Beginning Of Legalization

Cannabis has boomed into a multi-billion dollar industry, from the sales of cannabis flower to marijuana packaging — even if legalization is at a standstill in certain states. However, the recent string of states that have moved forward with ending statewide prohibition has certainly helped boost the large sums of taxes put into Uncle Sam’s pockets.

A report from Marijuana Policy Project found that $8 billion in tax revenue has been generated since the beginning of legalization in 2014. The study observed eighteen states that had legalized cannabis for adult use, though seven of those states had not fully established a legal sales market. As expected, the growing demand for both recreational and medicinal cannabis has been steady in regulated states. In 2020, the states with adult-use cannabis available made $2.7 billion in tax revenue from sales alone.

The study by MPP solely looks at state-wide revenue and not possible local taxes that might be imposed in different jurisdictions. California, for instance, racked up $1 billion in taxes. It’s a massive spike of 62% in comparison to the previous year. Meanwhile, Illinois isn’t far behind, even if their legal market was only established at the top of 2020. Experts believe that Illinois is on pace to break the $1 billion mark in tax revenue this year. 

“Legalizing cannabis for adults has proven to be a wise investment,” MPP state campaigns manager Jared Moffat said in a press release. “Not only are states seeing the benefits of a regulated market and far fewer cannabis-related arrests—they’re benefitting in a direct, economic way, too.”

This could be even more lucrative than other more established markets. Illinois raised more taxes from cannabis sales than alcohol sales during the final quarter of 2020.

The cannabis tax money is going back into programs for local communities. Taxes raised from cannabis sales in Colorado have been put towards public school system funding, while Oregon put a large percentage of their tax money behind public education and mental health and treatment programs.

“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities. But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care, and a range of other beneficial public programs,” added Moffat.

Reading next

New Study Shows That Recreational Marijuana Is Correlated With Higher Home Values
MedMen Seeks To Restructure Amidst Challenging Financial Insecurity

Leave a comment

All comments are moderated before being published.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.