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2024 Guide to Recreational Marijuana Taxes by State
October 9, 2024
Absolutely, let’s give it a more conversational tone!
Recreational marijuana taxation is a hot topic right now in the U.S. Many states are stepping up to regulate and tax legal cannabis sales, even though it’s still illegal at the federal level. This week’s map shows which states have created a legal market for recreational marijuana and have implemented an excise tax. By legalizing cannabis, states are encouraging people to turn to safer, regulated options while also bringing in tax revenue to fund important programs. Although we’re still learning about the potential harms of recreational marijuana, more states going legal means we’ll have more data to improve how we handle these taxes.
The way states tax marijuana can vary quite a bit. Some use weight, some go by price, and others focus on THC content. Ad valorem taxes—calculated as a percentage of the sale price—are straightforward but can lead to unpredictable revenue and don’t specifically target harmful aspects. On the other hand, ad quantum taxes based on weight or quantity tend to provide more stable income and focus on the harm-causing elements, although they can miss out on potency. Taxes based on THC content directly address the potential risks but often require expensive tech to measure, making them tricky to implement.
With these different tax structures, it can be tough to compare rates or understand the overall tax burden in each state. Plus, because federal prohibition is still a thing, interstate commerce is off the table, which means each legalized state is essentially its own island. If federal policies change, we might see more harmony between state systems.
Ultimately, we want marijuana taxes to be low enough so that legal markets can compete with the illicit ones. This way, we can help reduce harm to individuals and society while still bringing in essential tax revenue.
Here’s the reformatted content for your blog:
| State | Tax Rate(s) | Notes |
|---|---|---|
| Alaska | $50/oz of Mature Flowers | |
| Alaska | $25/oz of Immature Flowers and Abnormal Buds | |
| Alaska | $15/oz of Plant Trims | |
| Alaska | $1 per Clone Plant | |
| Arizona | 16% on Retail Sales | If a federal excise tax is imposed, AZ caps combined rates to 30% and automatically reduces the state rate to combine to 30%. |
| California | 15% on Retail Gross Receipts | Counties may impose additional excise taxes, which would be included in the gross receipts for the purposes of the state excise tax. |
| Colorado | 15% on Wholesale Average Market Rate | Counties and municipalities can impose additional excise taxes on wholesale transactions, up to 5%. |
| Colorado | 15% on Retail Sales | |
| Connecticut | $0.00625 per milligram of THC in plant material | |
| Connecticut | $0.0275 per milligram of THC in edible products | |
| Connecticut | $0.009 per milligram of THC in other cannabis | |
| Connecticut | $1 per THC Infused Beverage | |
| Connecticut | 3% Municipal Tax on Retail Gross Receipts | |
| Delaware | 15% on Retail Sales | The tax was imposed in April 2023, but sales have yet to actually begin. The Office of the Marijuana Commissioner only began accepting applications for licenses in August 2024. Licenses for cultivation are expected to be issued in November 2024, product manufacturing in December 2024, and retail in March 2025. |
| Illinois | 7% on Wholesale Gross Receipts | Counties and municipalities may impose additional taxes up to 3.75%. |
| Illinois | 10% on Retail Sales of Products with 35% or less THC | |
| Illinois | 20% on Retail Sales of Cannabis-Infused Products | |
| Illinois | 25% on Retail Sales of Products with more than 35% THC | |
| Maine | $335/lb of Flowers | |
| Maine | $94/lb of Plant Trim | |
| Maine | $35 per Mature Plant | |
| Maine | $1.5 per Immature Plant or Seedling | |
| Maine | $0.3 per Seed | |
| Maine | 10% on Retail Sales | |
| Maryland | 9% on Retail Sales | |
| Massachusetts | 10.75% on Retail Sales | Localities may impose additional taxes up to 3%. |
| Michigan | 10% on Retail Sales | |
| Minnesota | 10% on Retail Gross Receipts | |
| Missouri | 6% on Retail Sales | Cities and counties may impose additional taxes up to 3%, which was interpreted by Missouri courts to mean 3% each to total 6%. |
| Montana | 20% on Retail Sales | Counties may impose additional taxes up to 3%. |
| Nevada | 15% on Wholesale Fair Market Value | |
| Nevada | 10% on Retail Sales | |
| New Jersey | $1.24/oz Social Equity Excise Fee | The fee is calculated to be 0.333% of the Average Retail Price, capped per ounce depending on the Average Retail Price up to $10/oz. The rate cap increases if the average retail price decreases. Municipalities may impose additional taxes, up to 1% on wholesale receipts or 2% on cultivator, manufacturer, and retailer receipts, totaling 7% before accounting for pyramiding effects. |
| New Mexico | 12% on Retail Sales | Beginning July 1, 2025, the tax is set to increase incrementally 1% per year until reaching 18% in July 2030. |
| New York | 9% on Wholesale Sales | |
| New York | 9% on Retail Sales | |
| New York | 4% Local Tax on Retail Sales | |
| Ohio | 10% on Retail Sales | Legal retail sales began August 2024. |
| Oregon | 17% on Retail Sales | Cities and counties may impose additional taxes up to 3%. |
| Rhode Island | 10% on Retail Sales | |
| Rhode Island | 3% Local Tax on Retail Sales | |
| Vermont | 14% on Retail Sales | |
| Washington | 37% on Retail Sales |
