Census Bureau released its first report on marijuana tax revenue at the state level after “a complete canvassing of all state agencies”, dating back to July 20,21. The data shows that between July 2021 and the end 2020, states collected over $5.7 billion in tax revenue from cannabis sales.
The Census Bureau first announced in January 2021 that it would begin collecting marijuana tax figures for its quarterly summary of state and local government tax revenue. In January 2021, the Census Bureau announced that it would start collecting marijuana tax data for its quarterly summary state and local tax revenue. The Census Bureau also stated that it wanted states to include cannabis revenue data in their annual reports.
The Bureau announced that it would separate update the survey of American business to better understand marijuana-related economic activities.
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 more willing to acknowledge the billions dollars of revenue flowing into the state coffers each year as a result of marijuana legalization at the state level, even though the substance is still federally illegal.
The totals for the various U.S. States reflect the size and duration of each state’s market. Washington State and Colorado, the first two states that legalized non-medical marijuana, collected the second and third most tax revenue during the period included ($818.5 and $648.1 million, respectively).
California, on the other hand, has a massive market that produced over $1.4 billion of sales tax revenue in a year-and-a-half. In New York, where only about 20 retailers have been opened since December 2022, revenue was just $27.9 millions.
The Census data does not separate revenue by medical or adult markets.
In a note on the methodology of the survey, the Bureau said that the new data were “the result of a complete canvassing of all state governments.” The bureau initially refers the revenue as “quarterly Cannabis Excise Sales Tax Collections,” but later states that “taxes are defined quite broadly.”
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 only from sales tax or both. On Monday, a Census spokesperson did not immediately respond to an inquiry for clarification.
Census Bureau could be using a different definition for what organizations fall under the umbrella of’state government. The bureau’s description, it says, “includes not only the executive, legislative and judicial branches, but also agencies, institutions and commissions.”
This means that the tax revenue collected by local governments and counties is included in state statistics, since these funds are usually collected by state officials prior to being distributed to municipalities.
The dates reported are also unusual. Census states in its section on methodology that “cannabis sales taxes reported during a quarter represent taxes collected for sales made the previous quarter” (i.e. The data will be released in September 2023 and cover the sales for the quarter ending June 30, 2023.
Cannabis tax revenue data for our quarterly summary of state and local government tax revenues survey is now available.
Explore data for your state: https://t.co/bXtTo5aVp6#CensusEconData #StateGovernment #LocalGovernment pic.twitter.com/X8SpQwjEVa
U.S. Census Bureau September 28, 2020
The marijuana industry welcomed the federal recognition of the sector’s contribution to the economy, but added that more changes are needed. This includes reforms in tax laws and continued criminalization.
Aaron Smith, Executive Director of the National Cannabis Industry Association told Marijuana Moment that “this data shows how legal cannabis markets make positive contributions to the communities they serve.” We are still far from reaching our full potential in replacing criminal markets with tax paying, regulated businesses.
He said: “It is long past the time for legislators to act to improve the conditions for the industry, so that we can have an even greater positive impact.” “Reforming outdated banking regulations and the 280E would help existing state-based market to grow and generate more tax revenue. We need to deschedule federally in order to unleash the full potential of this industry as an economic engine.
The president of Minority Cannabis Business Association Kaliko Castille said, “This move by the Census Bureau shows that decades of advocacy have helped bring the cannabis industry to the forefront of the American economy, and that the genie will not be put back into the bottle.” He also noted the “irony,” of the federal government’s 280E provision that prevents marijuana operators writing off business expenses on their taxes, like operators in other sectors can.
When you’re trying to change the law, having data to back up your argument is a great way to make it stronger. Castille explained that, with the Census Bureau collecting this type of data, advocates can now point to official federal data when it comes to proving the economic impact of cannabis. Castille said, “Not only does our industry employ hundreds of thousands across all legal states but we also have proof that it generates billions in tax revenue.”
David Culver is the senior vice president for public affairs at the U.S. Cannabis Council. He said that the group was “thrilled” to see the Census Bureau collecting and analyzing data on the increasing number of state cannabis market around the country.
He said that legalizing and regulating marijuana is not only the correct thing to do but also fiscally prudent. The new Census Bureau analysis shows that, under President Biden’s direction, the federal government is modernizing and preparing its approach to cannabis.
The newly released Census data shows a significant drop in marijuana tax revenues across the country during the reporting period. The second quarter 2022 was the highest in terms of total cannabis taxes, with $839.6 millions across all states. Otherwise, revenue decreased between the third and second quarters of 2021 (772.1 million dollars) and 2023 (606.65 million dollars).
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.
In Maryland, licensed retailers sold a -record amount of cannabis products for adult use in September, even though medical marijuana sales declined.
In New Mexico, sales for the month of September barely missed the sales record for August. The state also crossed the $500 million mark in 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 opened in early 2017.
Data from the state show that in August , Connecticut broke yet another record for marijuana sales, this time with 25 million dollars worth of purchases made by adults and medical users.
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 a new record high 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 in marijuana sales per day. The state also saw a record amount of $121.2 million spent on cannabis in June.
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