The U.S. Census Bureau has published a new map that shows the percentage of state revenues made up by marijuana taxes. In some cases, these figures are shocking.
Oregon, for instance, made roughly $1 of every $20 it earned during certain recent periods from legal cannabis transactions. Federal data shows that marijuana taxes accounted for 4.67 percent of Oregon’s total revenue during the first three months of fiscal year 2023. This figure was 4.7 percent the following quarter and 5.21 percent the third quarter.
While Oregon by far relied heaviest on marijuana tax dollars, other states–including Michigan, Illinois, Alaska and Colorado–consistently saw marijuana revenue make up at least 1 percent of state income over the past two years.
U.S. Census Bureau
The data cover the third quarter fiscal year 2021 to the second quarter fiscal year 2023. However, the bureau has stated that it typically reports sales data that reflects revenue collected by states on sales that were made during the previous quarter.
Oregon’s revenue from legal cannabis accounted for more than 3 percent during the last quarter of data available. This includes sales up to the end of December 2020. In Michigan and Illinois the marijuana industry accounted for more than 2 percent, while Alaska, Colorado, and Washington State made up just over one percent. Arizona and Missouri saw cannabis contribute between 0.5 and 1 percent to their tax revenue.
The revenue from marijuana is a tiny fraction of the total state tax revenue, but the millions of dollars that flow into the state coffers are a significant contribution. Illinois’ legal marijuana industry generated $451,9 million in revenue during the fiscal period that ended on June 30,. This is nearly 1.5 times more than the $316.3 millions Illinois collected in alcohol taxes over the same time period.
Colorado and Washington will receive more revenue in fiscal year 2022 from cannabis legalization than alcohol or cigarettes.
The interactive map allows you to sort by the change in state marijuana taxes from quarter-to-quarter. States like Mississippi, Connecticut, and New York have seen their cannabis tax revenues double in the second quarter fiscal year 2023. California, Missouri, and Maine experienced revenue growth between 60 and 90 percent. Massachusetts saw a decrease of 33.4 percent in its cannabis tax revenue.
U.S. Census Bureau
The federal government is making a concerted effort to measure the size and scope the legal cannabis market. Census Bureau calls the accounting a “new product” and includes both public and private sector data on cannabis.
The agency released a report late last month showing that the states with legal cannabis had collected over $5.7 billion in marijuana taxes during an 18-month period. It plans to continue updating this figure quarterly. Census updated its survey of businesses in order to better capture marijuana related economic activity.
The new tracking and reporting initiatives, which come almost a decade after state-level legalization of cannabis for adult use in the United States, indicate that the federal government is increasingly willing to acknowledge the economic activity of billions of dollars per year as a result of marijuana legalization at the state level, even though the substance is still federally illegal.
In a separate statement about the survey methodology, the Bureau said that the new state tax data used to create the infographics was “the result of a complete canvassing of all state governments.” The bureau refers to this revenue as “quarterly cannabis sales tax collections” but also states that the term “taxes”, which is used rather broadly, has a very broad definition.
Census stated that “taxes” is defined as all mandatory contributions collected by a government to serve public purposes. Census said that “tax revenue” is defined as the total of all government penalties and interest, but excludes protested amounts.
The Bureau has two different tax codes that it requests states report for marijuana revenue, one for taxes on cannabis transaction and the other for business license fees. The totals of the new report are not clear. They could include revenue from sales tax alone, or both. This week, a Census spokesperson did not immediately respond to an inquiry for clarification.
The agency stated that its figures may not match exactly with the state-reported numbers “because the Census Bureau might be using a differing definition of what organizations are included in the term’state government’.” The bureau’s explanation, it explained, “refers to not only the executive, legislative and judicial branches, but also agencies, institutions and commissions of a particular state.”
Aaron Smith, Executive Director of the National Cannabis Industry Association told Marijuana Moment this week that he was pleased with Census’s recognition of the sector’s contribution to the economy. He said that the data shows how legal cannabis markets contribute positively to their local communities. “However we are still not even close to reaching the full potential of replacing criminal markets with tax paying, regulated businesses.”
The current Census Bureau reporting period excludes the majority of sales made this year. Some states broke monthly sales records several times.
Illinois officials recently touted the “unprecedented” growth of the marijuana industry in fiscal year 2023. Regulated stores sold more than $1.5 Billion in marijuana products. Stores in the state have sold more cannabis products during September than any previous month. Tax revenue dropped to $420.9 from $435.1 in the fiscal year 2023. Illinois has made more money from cannabis in the past than it did from alcohol.
Connecticut has surpassed ‘s previous record of $25 million sales for September.
In Maryland, licensed retailers sold a -record amount of cannabis products for adult use in September, despite a decline in medical marijuana sales.
New Mexico’s monthly sale record in September was narrowly missed by the August sales record. The state also crossed the $500 million mark for adult-use sales.
In Rhode Island, also had a record month, selling the most cannabis for a fourth consecutive month. The state earned $9.7 per month.
State officials in Montana reported that purchases of adult use cannabis also reached a new record in August ($23.7million), despite the fact that medical marijuana sales (at $5 million) were at their lowest level since recreational markets were opened in early 2017.
According to data released by the Office of Cannabis Policy in Maine, marijuana purchases reached a new high of nearly $22,000,000 during August.
Massachusetts officials announced in early August that since the launch of the adult-use market in Massachusetts five years ago, retailers had sold over $5 billion worth of marijuana. The sales reached $139.3 in August, and the total year-to date is $1.05 billion by the end of the first eight months.
Michigan marijuana sales also reached another record in July with nearly $277 millions worth of cannabis being sold.
Since the adult-use marijuana market was opened in Missouri in February, the state has seen an average of $4 million worth per day in sales. The state also saw a record amount of $121.2 million spent on cannabis in June.
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