Nearly two dozen states in the U.S. now permit legal recreational cannabis sales. Legal adult-use cannabis product sales first began in Colorado in January 2014, making it the first state to permit regulated sales of such products.
Cannabis remains prohibited at the federal level, being classified as a Schedule I substance. As such, state-level industries operate as siloed markets, each with its own approach to regulating and taxing cannabis product sales. Below is a breakdown of the tax rates for each state-level market, via the Tax Foundation:
- Alaska – $50/oz. on ‘mature’ flowers, $25/oz. on ‘immature flowers, $15/oz. on ‘trim’, and $1 per cannabis clone
- Arizona – 16% on retail sales
- California – 15% on retail gross receipts (a July 2025 tax increase to 19% was paused for five years)
- Colorado – 15% on wholesale average market rate, and 15% on retail sales
- Connecticut – 3% on retail sales, $0.00625 – $0.009 per milligram of THC in non-beverage cannabis products, and $1 per THC-infused beverage
- Delaware -15% on retail sales
- Illinois – 7% on wholesale gross receipts, 10% on retail sales of products with ≤35% THC, 25% on retail sales of products with >35% THC, and 20% on retail sales of infused products
- Maine – 10% on retail sales, $335/lb. of flower, $94/lb. of ‘trim’, $35 per ‘mature’ plant, $1.5 per ‘immature’ plant, and $0.30 per seed
- Maryland – 9% on retail sales
- Massachusetts – 10.75% on retail sales
- Michigan – 10% on retail sales
- Minnesota – 10% on retail gross receipts
- Missouri – 6% on retail sales
- Montana – 20% on retail sales
- Nevada – 15% on wholesale fair market value and 10% on retail sales
- New Jersey – $2.50 per ounce
- New Mexico – 13% on retail sales
- New York – 9% on wholesale sales and 13% on retail sales
- Ohio – 10% on retail sales
- Oregon – 17% on retail sales
- Rhode Island – 13% on retail sales
- Vermont – 14% on retail sales
- Washington – 37% on retail sales
As you can see from the bullet-pointed list above, some states tax cannabis by weight, some tax products by the point-of-sale price, some by wholesale price, and some tax cannabis based on THC content. Multiple states have implemented a combination of taxes.
It is also worth noting that many states also allow local governments to implement their own cannabis taxes, such as in Oregon where many local governments have a 3% tax on retail cannabis sales in addition to the state tax. As such, determining which state taxes cannabis ‘the most’ is not as straightforward as many people may think given the variable factors involved.
An analysis by the Marijuana Policy Project, published in May 2025, found that since the launch of taxed and regulated adult-use cannabis in Colorado in January 2014, legal states had collectively generated more than $24.7 billion in tax revenue from recreational cannabis sales.
A recent market analysis and report by Vangst Staffing and Whitney Economics determined that the legal cannabis industry in the United States sold roughly $30.1 billion worth of cannabis products in 2024. The report also found that the legal U.S. industry supports 425,000 full-time jobs.