State Marijuana Revenue in USA

For legislators across the country, the question of whether to legalize recreational marijuana often boils down to economic factors and constituent attitudes. Voters throughout the United States have made their opinions on cannabis clear in recent years, but the majority of states have not yet legalized recreational marijuana sale and use.

Legislators from across the United States have had plenty of time to see the results of marijuana legalization and to compare them between states. Even states with historically poor views on cannabis are likely to be spurred to action by the sales figures and tax incomes that states with legalized recreational use are raking in.

Now that the figures for 2018 are in, we can draw accurate conclusions about the state of the cannabis industry at large on a state-by-state basis. Let’s look at some the financial takeaway states enjoy from legal marijuana sales and what challenges they’ll have to meet in the upcoming years.

District of Columbia: $17.7 Million

Washington, D.C.’s legal marijuana market is smaller and more complex than than any other in the United States. Marijuana sales remain technically illegal, but cannabis cultivation and transaction is legal so long as the marijuana itself is a gift.

As a result, Washington D.C.’s $17.7 million in cannabis sales are in fact the result of tangentially related purchases of stickers, raffle tickets, T-shirts, mugs, or intangible products like music and poetry that are accompanied by marijuana as a promotional giveaway.

Alaska: $39.5 Million

Marijuana has been legal in Alaska since 2014. The state’s cannabis industry has a few unique barriers to overcome. Marijuana is mostly only available in the state’s few large cities, but the majority of its rural population and tourist destinations have little access to cannabis products.

For the largest state by land area and the least densely populated, getting legal marijuana to customers comes with significant logistical challenges. These are the same challenges that apply to nearly every product that has to makes its way up to the Last Frontier.

Maine: $83.4 Million

Maine was one of the first East Coast states to legalize recreational marijuana. However, there are still bureaucratic barriers to overcome, particularly when it comes to efficiently taxing and regulating recreational cannabis sales.

The state framework allows local governments to opt in or out of marijuana dispensary laws. This sets a less-than-ideal precedent for marijuana entrepreneurs who have to navigate increasingly complex regulatory landscapes in order to grow their businesses from one city to another.

Nevada: $102.7 Million

Nevada’s recreational cannabis laws allow people to consume marijuana on private property with owner permission. This makes the cannabis industry easy enough for residents to live with, but it challenges tourists who stay at the famous casinos on the Strip in Las Vegas – casino owners are reluctant to breach federal law because the government can revoke their gaming licenses.

But the increasing revenue that cannabis generates for the state is prompting legislators to consider alternative options. Marijuana-friendly bars, hotels, and tours are quickly taking root throughout the state, but large-scale establishments are still a ways off.

Massachusetts: $106 Million

Historically, Massachusetts has always had a progressive outlook on cannabis. The state’s regulatory process is relatively robust and encouraging of entrepreneurship. Although marijuana consumption is not allowed in dispensaries, the state is gradually moving closer to an Amsterdam-like system of social use establishments – cannabis cafes.

Massachusetts is also considering home delivery options, but the state’s legislators aren’t yet on the same page about potential security concerns. One of the chief concerns is that a marijuana delivery framework would lead to an uptick in robberies, but that hasn’t happened in any of the states that allow marijuana delivery.

Oregon: $777.6 Million

Oregon is a heavy-hitter in the world of legal recreational marijuana. It is an important hub for cannabis research, culture, and industry. Portland is an especially active city for the state’s cannabis industry and an attractive cannabis tourism destination.

There is good reason for this – Oregon boasts one of the world’s best cannabis-growing ecoregions. The relationship between cost and quality of Oregon-grown cannabis is often superior to what is possible in other regions. It was also the first state to legalize home cannabis delivery.

Oregon’s 20% marijuana tax leads to a take-in of $154 million for the year. That’s enough to pay for the entire Oregon Opportunity Grant, the state’s largest public grant program responsible for sending 40,000 underprivileged students to college annually.

University of Oregon

Washington: $1 Billion

Washington’s $1 billion sales figure represents the largest per-capita take-in of any U.S. state. Washington has only 7.4 million residents and a state GDP of $517 billion.

Alongside Oregon, Washington is a pioneer in recreational marijuana legalization. It has one of the country’s most developed legal markets. Washington residents enjoy the highest saturation of brands and individual marijuana products of any state.

Colorado: $1.56 Billion

Colorado is one of the most marijuana-friendly states in the nation. As the first state to legalize recreational cannabis use, it enjoys a flourishing tourist industry that continues to develop.

The state’s current priority is making use of its significant cannabis tax income to improve the sustainability of the intersection between its cannabis and tourism industries. Environmentally conscious entrepreneurs are looking for ways to organically cultivate and grow marijuana in zero-waste facilities.

California: $2.5 Billion

California’s 2018 introduction of legal recreational cannabis sales brought the nation’s largest economy into the cannabis market’s fold. Predictably, California surged ahead of every other state and now leads the pack in cannabis sales.

The state’s 15% sales tax on marijuana products means that it added $375 million to its coffers in 2018 from direct sales alone. That’s enough to fund the U.S. Department of Agriculture’s Agriculture and Food Research Initiative for a year. The added value of indirect taxation from employee salaries, infrastructural investment, and other activities only serves to increase the overall value of the statewide cannabis market for the world’s 5th largest economy.

The regulatory landscape in California is notably stricter than that of other states. While public and social consumption is perfectly acceptable, cannabis business owners must comply with strict testing and child-proof packaging requirements.

Sources:

https://www.forbes.com/sites/andrewdepietro/2018/05/04/how-much-money-states-make-cannabis-sales/#361d768ff181

https://www.sciencemag.org/news/2017/05/how-science-fares-us-budget-deal

https://www.gobankingrates.com/making-money/economy/how-much-money-states-make-marijuana/#2

https://www.cnbc.com/2018/09/15/heres-what-you-need-to-know-about-dc-marijuana.html

https://www.rollingstone.com/culture/culture-features/the-rolling-stone-guide-to-legal-pot-alaska-628119/

https://www.rollingstone.com/culture/culture-features/the-rolling-stone-guide-to-legal-pot-maine-630646/

https://www.rollingstone.com/culture/culture-news/the-rolling-stone-guide-to-legal-pot-nevada-62810

https://www.nhpr.org/post/massachusetts-inches-closer-licensing-cannabis-cafes#stream/0