States where cannabis is legal generated more than $3.7 billion in cannabis tax revenue last year from adult-use sales — a 34 percent increase compared to 2020, according to a new report from the Marijuana Policy Project.
“Our report is further evidence that ending cannabis prohibition offers tremendous financial benefits for state governments. The legalization and regulation of cannabis for adults has generated billions of dollars in tax revenue, funded important services and programs at the state level, and created thousands of jobs across the country. Meanwhile, the states that lag behind continue to waste government resources on enforcing archaic cannabis laws that harm far too many Americans,” Toi Hutchinson, president and CEO of the Marijuana Policy Project, said.
The report points out that these tax revenues can be allocated for social services and programs, including funding education, school construction, early literacy, public libraries, bullying prevention, behavioral health, alcohol and drug treatment, veterans’ services, conservation, job training, conviction expungement expenses, and reinvestment in communities.
Currently, 18 states have laws that legalize, tax, and regulate cannabis for adults 21 and older. Several other states — including Maryland, Missouri, Ohio, Rhode Island, and South Dakota – could be next. Since 2014 since Colorado and Washington first legalized cannabis, states reported a combined total of $11.2 billion in tax revenue from legal, adult-use cannabis sales.
In 2021, California generated the most tax revenue, about $1.3 billion, followed by Colorado ($630 million), Illinois ($424 million), Colorado ($396 million), and Massachusetts ($227 million).