States have collectively generated more than $15 billion in adult-use marijuana tax revenue from 2014 to 2022, a new report published on Monday by the Marijuana Policy Project (MPP) found.
But while legal states saw about $3.8 billion in cannabis tax dollars in 2022 alone, it represented the first time that revenue was lower than the prior year, which experts attribute to a “multitude of factors,” including COVID-related policies and trends.
Still, the fact that 2022 brought in almost $100 million less in tax revenue compared to 2021 is notable given that more states like New Jersey and New Mexico launched their recreational markets last year, which would presumably lend to higher tax yields.
States where cannabis legalization is newer did see higher levels of tax revenue, but six states with the most established markets have seen declines offsetting those gains.
Here are the 2022 state-by-state totals:
- Alaska: $28,649,408
- Arizona: $223,863,799
- California: $1,074,560,287
- Colorado: $305,034,034
- Illinois: $562,119,019
- Maine: $25,329,534
- Massachusetts: $250,710,415
- Michigan: $326,049,074
- Montana: $41,989,466
- Nevada: $196,952,338
- New Jersey: $20,139,655
- New Mexico: $36,684,235
- Rhode Island: $579,439
- Oregon: $150,316,424
- Washington: $529,443,420
- Vermont: $2,363,000
Here are the national year-by-year totals:
- 2014: $68,503,980
- 2015: $264,211,871
- 2016: $530,521,110
- 2017: $736,534,982
- 2018: $1,308,693,928
- 2019: $1,749,459,667
- 2020: $2,814,837,199
- 2021: $3,866,974,690
- 2022: $3,774,783,548
- CUMULATIVE TOTAL: $15,114,520,975
Vicente LLP Director of Economics and Research Andrew Livingston said in a press release that the overall decline in 2022 were “due to a multitude of factors.”
“While 2022 cannabis taxes are lower in some established markets than they were in 2021, it’s important to know how COVID-19 and pandemic initiated lockdown orders increased cannabis demand,” he said. “People could not spend their money going to concerts, going out to dinner, or vacation travel. So many people increased their consumption of consumer packaged goods. Cannabis was a product that could still be purchased and made the difficulty of staying at home for months on end watching TV shows and movies a bit more enjoyable.”
Toi Hutchinson, president and CEO of MPP, said that states that have enacted legalization “are benefiting from hundreds of millions in tax revenue each year.”
“These new streams of revenue are helping to fund crucial social services and programs across the country, such as education, alcohol and drug treatment, veterans’ services, job training, and reinvestment in communities that have been disproportionately affected by the war on cannabis,” she said. “The states that lag behind will not only be doing a disservice to their constituents—they will also be leaving money on the table.”
The new report only looks at recreational marijuana revenue and doesn’t account for sales conducted via states’ separate medical cannabis programs.
With newer markets continuing to mature—and states like Delaware and Maryland positioned to launch their own industries after more recently ending prohibition—the expectation is that more tax dollars will follow in the coming years.
States in newer markets have continued to see record-breaking marijuana sales as more businesses are licensed and consumers move to the regulated industry.
For example, Michigan cannabis sales reached a record high in March, with nearly $250 million in combined recreational and medical cannabis purchases, according to state regulators.
Connecticut also saw a record $22 million in combined recreational and medical marijuana sales in March.
Missouri cannabis sales reached a record $126 million that month, the second month since adult-use shops opened in the state after voters approved legalization at the ballot last November.
The governor of New Mexico recently marked the one-year anniversary of the state’s adult-use marijuana market, touting its more than $300 million in sales since last April as well as the thousands of jobs the cannabis industry has created.
In Arizona, the year-end total for 2022 adult-use cannabis purchases reached $1.4 billion.
In Massachusetts, the state’s recreational market officially exceeded $4 billion in sales in January after launching in 2018.
Conversely, a top Wisconsin senator recently released a legislative analysis that showed just how much money her state lost out to Illinois last year, with Wisconsin residents who lack a regulated market going across the border and spending more than $121 million on marijuana.