United States: 4.7 billion $ in cannabis taxes collected in 2017

The U.S. government collected $4.7 billion (€4.15 billion) of the nearly $13 billion generated by legal cannabis businesses in 2017, according to a report from Quartz.

Even though cannabis is not legalized at the federal level, cannabis companies pay federal taxes on their revenues without being entitled to any expense deductions, which can push their federal tax rate up to 90%. Most of these companies cannot access banking services, due to federal restrictions, and are forced to manage everything in cash, including their tax payments, a headache for the US FISC.

What's the use of tax money?

Depending on the state, the taxes collected are used differently, but mainly for public services. According to the Tax Policy Center, the breakdown is as follows:

• Alaska dedicates 50% of its cannabis revenue to its general fund and 50% to crime reduction programs.
• California uses its cannabis revenues to cover the administrative costs of legalization, with additional funds earmarked for economic development, university education and youth programs.
• Colorado earmarks its cannabis revenues for education.
• Massachusetts pays for various public safety programs with the cannabis taxes it collects.
• Nevada uses its cannabis revenues for education programs and to supplement its rainy day fund.
• Oregon funds education and addiction treatment and prevention programs with its cannabis revenues, some of which go to local governments.
• Washington State uses its cannabis revenues for health care.

For a more complete overview, see our article: Where does US cannabis tax money go?