Cannabis earns 10 billion in U.S. taxes

It’s a nice little windfall for U.S. public finances. Since 2014, recreational cannabis sales have generated $10.4 billion in tax revenue for the 18 states that have legalized it. This is the result of a calculation from Marijuana Policy Project (MPP). This pro-legalization lobby has compiled all the tax data from each state, citing sources so that anyone can verify it.

The MPP calculations include only recreational cannabis, not medical cannabis. And they begin in 2014, since that is the year when the Colorado has become the first U.S. state to legalize cannabis for adults. However, it is not this state that collects the most taxes; it is California.

The state of Los Angeles, San Francisco, and San Diego collected $3.1 billion in taxes… in just four years! Rounding out the top three are Washington State (not to be confused with the capital, Washington, D.C.) and Colorado. The former has brought in $3 billion in revenue in the eight years since legalization. The latter has brought in $1.7 billion.

Between 9 and 37 % in taxes, depending on the state

The calculations for Marijuana Policy Project also highlight the significant differences in taxation from state to state. In France, we have a single tax applied everywhere: VAT. In the United States, since it is a federal system, the states make their own decisions. Some states impose low taxes on cannabis, particularly to compete with the black market. Others prefer to impose heavier taxes, particularly to redirect funds to schools or social justice programs.

The clear winner is Washington State. Located in the far northwest of the country, the’Evergreen State collects 37 % from cannabis sales to fund its budget. There, cannabis already generates more revenue for the state than alcohol. And this has made it possible to free up $600 million, particularly to help low-income families who cannot afford health insurance.

Another leader: California. For one ounce (28 grams) of cannabis, the state charges $9.25 in taxes. In addition, there is a 15 % excise tax, a special tax, and 7.25 % in VAT.

New York, too, is rubbing its hands together. Even though sales have not yet begun, members of the National Assembly and the Senate agreed on a tax based on the THC content of the products. This could therefore range from 12 to 35 %. In addition, a 13 % VAT will be applied.

In contrast, others have opted for a more liberal model. Alaska, for example, charges $50 in taxes per ounce, which generally sells for around $300. Michigan levies approximately 16 % in taxes. The same goes for Oregon, at 17 %.