Medical use of marijuana has long been legal in many of the states. Such use requires a prescription from a doctor.
However, as of April 2024, 24 states have legalized recreational marijuana use—that is, the use of marijuana of a specified amount of marijuana for any purpose without a prescription. These states are Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, Vermont, Virginia, and Washington. It is also legal in Washington, D.C.
Each state that has established a legal market for recreational marijuana imposes taxes on cultivation and sales. These vary significantly from state to state.
The three main types of taxes are the following:
Here are some frequently asked questions regarding marijuana taxation.
As of late 2023, Washington has the highest marijuana excise tax rate at 37%.
The U.S. Census Bureau provides an online tool showing quarterly cannabis tax data from 2021 to present. In the fourth quarter of 2023, Washington, Alaska, Colorado, and Montana brought in the most revenue from marijuana (shown as a percentage of their total tax revenue).
Colorado has a 15% retail marijuana sales tax on all sales of retail marijuana and retail marijuana-infused products. See the Colorado Department of Revenue's Marijuana Sales Tax and Marijuana Taxes websites for more information.
Michigan imposes an excise tax of 10% on retail marijuana sales in addition to a 6% sales tax. (See the Michigan Regulation and Taxation of Marihuana Act of 2018.) The Michigan Department of Licensing and Regulatory Affairs and the Michigan Department of Treasury handle marijuana tax administration in the state.
The Illinois tax rates for recreational marijuana are complicated. See the Illinois Department of Revenue website for more information.
Medical marijuana is exempt from sales taxes in Florida. (In Florida, marijuana is illegal for recreational use. However, Florida Amendment 3, also called the "marijuana legalization initiative," is on the November 2024 ballot.)
California imposes sales and use tax unless subject to a specific exemption.
California requires consumers to pay a 15% cannabis excise tax plus other state and local sales taxes.
Ohio has a 10% excise tax plus sales taxes.
Marijuana excise taxes are as follows in the selected states shown below. (Keep in mind that additional taxes, such as sales and local taxes not shown in this chart, might also apply.)
State |
Tax Rate |
Alaska |
$50 per ounce for mature flowers or buds $15 per ounce for trim $25 per ounce for immature flowers or buds $1 per clone |
Arizona |
16% excise tax |
California |
15% excise tax |
Colorado |
15% excise tax |
Connecticut |
Connecticut's rate is potency-based at 2.75 cents for a milligram of tetrahydrocannabinol (THC) for edibles and 0.9 cents for a milligram of THC for other products |
Maine |
10% excise tax |
Massachusetts |
10.75% excise tax |
Michigan |
10% excise tax |
Nevada |
15% excise tax |
New Mexico |
12% retail sales excise tax |
Washington |
37% excise tax |
To find more information and a chart showing the excise taxes consumers must pay when purchasing marijuana, go to the Tax Foundation's article Does Your State Tax Recreational Marijuana? You can also review the Federation of Tax Administrators article on State Taxation and Sales of Recreational Marijuana.
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