According to a recent report released by the Marijuana Policy Project, state-legalized adult cannabis sales generated more than $3.7 billion in tax revenue across the United States in 2021.
While that number seems large and registers as a 34% increase in tax revenue compared to what the cannabis industry generated in 2020, all indicators suggest that this total will continue to grow in the foreseeable future.
In addition to this report, MPP also released the result of a multi-year revenue analysis that tracked the amount of tax revenue generated by the cannabis industry since 2014, the year that recreational sales began in Colorado and Washington State. When including the newly calculated contributions from 2021, the cannabis industry has generated a total of $11.2 billion in tax revenue in the past seven years.
A year-by-year breakdown of recreational cannabis sales tax revenue growth:
• 2014: $68,503,980
• 2015: $264,211,871
• 2016: $530,521,110
• 2017: $723,145,481
• 2018: $1,275,483,830
• 2019: $1,707,204,090
• 2020: $2,766,027,570
• 2021: $3,715,994,252
While impressive, when evaluating these numbers it is important to remember that the calculated tax revenue total does not include a list of revenue-generating activities that would have made the total much larger.
For example, corporate taxes paid to the federal government, medical cannabis tax revenue, application fees, licensing fees, and income taxes generated by cannabis industry employees were all left out of the $11.2 billion dollar total reported by MPP.
Legalizing cannabis for adults has been a wise investment. In 2021 alone, legalization states generated more than $3.7 billion in cannabis tax revenue from adult-use sales. https://t.co/PIBn6kwVtg
— Marijuana Policy Project (@MarijuanaPolicy) April 6, 2022
The potential for cannabis-generated tax revenue to help states fund general expenses is something that has long been pointed out by cannabis supporters, but now it is becoming a reality that is hard to ignore. Toi Hutchinson, President and CEO of MPP, reinforces this idea in a recent press release.
“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,” Hutchinson says. “Meanwhile, the states that lag behind continue to waste government resources on enforcing archaic cannabis laws that harm far too many Americans.”
The team here at Commerce Puzzle feels just as strongly about the situation as Hutchinson does, and the reason is in the data. Take a look at a breakdown of sales tax revenue generated by recreational cannabis sales, and it is clear that pro-prohibition states are missing out.
Here’s the breakdown:
• Alaska: $28,900,231
• Arizona: $153,824,757
• California: $1,294,632,799
• Colorado: $396,157,005
• Illinois: $424,206,703
• Maine: $12,362,622
• Massachusetts: $227,474,842
• Michigan: $209,912,278
• Nevada: $159,885,501
• Oregon: $177,773,944
• Washington: $630,863,570
There is no doubt that the legalization of cannabis is coming, the only questions left to answer are “when?” and “how?”
If you own a cannabis brand, the time for you to position your business in a manner that is truly unique while having the advantage of starting early is running out.
The cannabis industry is here to stay, and that means there will be a huge wave of growth and competition after federal legalization. If you need a cannabis web design agency to help you reach your goals, we are here for you.
According to a recent report released by the Marijuana Policy Project, state-legalized adult cannabis sales generated more than $3.7 billion in tax revenue across the United States in 2021.
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