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How Much Did States Make from Cannabis in 2016?

Jackie Tortello

February 2nd, 2017

Policy, Top News

There’s no doubt that cannabis tax revenue has drawn many startups into the business, leaving major corporations left out in the cold. With the accessibility and growing number of products, the main questions are, how much did states make from cannabis in 2016 and where will the market head in the future?

Which States Have Legalized Marijuana?

Four states and the District of Columbia have legalized the sale of retail marijuana by popular vote, with an additional 25 states permitting the use of medical marijuana or decriminalizing marijuana possession, according to a statement from taxfoundation.org. Since 2011, polls have shown that Americans consistently support the legalization of marijuana and it’s more than likely a number of states will continue to push forward in their effort get medical and recreational marijuana backed by legislative support.

How Much Did States Make?

Marijuana comes in many versatile forms. It can be purchased as a joint, an edible, a liquid, or a vapor. This makes a specific excise tax untenable, according to taxfoundation.org. Knowing this, each state has framed their taxes as a certain percentage of retail or wholesale prices.

On a national scale, the retail sale of marijuana could rake in over $28 billion in federal, state, and local tax revenue each year.  However, when this amount is broken down state by state, it’s easier to identify how much marijuana is being purchased and what states are doing with the excess revenue.

Colorado

Retail marijuana sales in Colorado began on January 1, 2014, after voters approved Amendment 64, which legalized marijuana in November 2012 and Proposition AA establishing marijuana taxes in November 2013, according to a statement from ballotopedia.org.

During 2014, marijuana tax revenue made approximately $56 million and that number grew to $113 million during 2015. Marijuana tax revenue was also expected to grow to $140 million in 2016. Because of such high growth rates and popularity, Colorado plans to reduce marijuana taxes in July 2017.

Washington

Retail marijuana sales in Washington began on July 8, 2014 while medical marijuana had been legal since 1998. With little regulation, licensing or requirements a new framework has reshaped Washington’s marijuana industry by allocating 30 percent of marijuana tax revenue to local governments based on population, after it rakes $25 million. In its first full year of sales, from July 1, 2015 to June 30, 2016, Washington collected $62 million in marijuana excise taxes, $10 million in state sales taxes, $1.3 million in state B&O taxes, and $3.6 million in local sales taxes on $157 million on retail sales, according to a statement from The Washington Department of Revenue.

In Washington, adults are allowed to purchase up to one ounce of the flowered portion of the plant, 16 ounces of edible solids, 72 ounces of marijuana-infused liquids, or 7 grams of concentrates or lotions. In Colorado, residents can purchase up to one ounce of any kind of marijuana product and non-residents can purchase up to a quarter of an ounce.

Oregon

In January 2016, Oregon collected $3.48 million in taxes on $14 million in recreational marijuana sales, three times official revenue projections, according to taxfoundation.org. Only 253 of 309 licensed dispensaries made tax payments; while some may not be selling recreational marijuana, some may not have known of their obligation to collect taxes. If so, future revenue could reach around $60 million per year, even with the lower tax rate, according to a statement from taxfoundation.org.

Looking Ahead

As the market continues to grow and develop, it’s more than likely states will continue to recognize the potency of marijuana tax revenue while supporting it at a legislative level.

To learn more about cannabis taxes and legalization, sign-up for our free newsletter using the form to the right.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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