States have taken a variety of approaches to legalizing, regulating, and taxing cannabis — including the method and rate of taxation. The states with the highest taxes on cannabis are Alaska and Washington state. In Washington, the total tax on retail sales can be as high as 47.4% with local taxes factored in. Meanwhile, Alaska imposes a $50/ounce tax on cultivation, meaning the effective tax rate goes up as prices drop. At the lower end of the spectrum, Maryland imposes a more modest 12% retail tax on cannabis.
High taxes can make it difficult for legal businesses to compete with illicit sales, and undermine the goal of moving sales to the regulated cannabis market. They can also drive customers across state lines to jurisdictions with more reasonable rates.
State
Wholesale Excise Tax Rate
Retail Excise Tax Rate
Standard Sales Tax (if sales tax applies to cannabis)
Local Sales Tax Rates
Applicable to Medical?
Alaska
Flower: $50/oz ($25 for abnormal bud) Trim: $15/oz
N/A
N/A
Some local cannabis- specific taxes
N/A — Medical law does not include sales.
Arizona
N/A
16%
5.6% (TPT)
Standard local taxes of 2-3%
No, but the TPT tax and local tax apply to medical.
California
N/A
15%
7.25%
Standard local taxes of up to 3%; some local cannabis- specific taxes
Partially, the 15% retail excise tax applies. Sales taxes do not apply to registered patients.
Colorado
15%
15%
N/A
Standard local taxes of up to 6%; some local cannabis- specific taxes
Registered patients are exempt from 15% retail excise tax, but most pay 2.9% standard sales.
Connecticut
None
$0.00625/mg THC for flower; $0.0275/ mg THC for edibles; $0.009/mg THC for other products
6.35%
No, medical cannabis is not taxed
Delaware
N/A
15%
N/A
N/A
No, medical cannabis is not taxed
Illinois
7%
Flower: 10%
Products: 20%
≥35% Potency: 25%
6.35%
Up to 3.5%
Registered patients are exempt from most taxes, but medical is taxed via a 7% cultivation tax and a 1% pharmaceutical tax.
Ohio
N/A
10%
5.75%
Up to 2.25%
Medical sales are taxed at a lower rate. Only the standard sales tax of 5.75% applies
Maine
Flower: $223/lb
Trim: $63/lb
Seedling: $1.00
14%
N/A
N/A
Medical sales are taxed at a lower rate —5.5% for flower, 8% for edibles
Maryland
N/A
12%
N/A
N/A
No, medical cannabis is not taxed
Mass.
N/A
10.75%
6.25%
Local cannabis- specific taxes of up to 3%
No, medical cannabis is not taxed.
Michigan
24% (subject to a court challenge)
10%
6%
N/A
Medical is subject only to 6% standard sales tax.
Minn.
N/A
15%
6.875%
Standard local taxes of up to 2%
No, medical cannabis is not taxed
Montana
N/A
20%
N/A
N/A
No. Medical providers pay a 4% tax on gross cannabis sales.
Nevada
15% of fair market value
10%
4.6%
Up to 3.665%
Medical has a lower rate: 15% at wholesale, with the 10% retail tax waived.
New Jersey
SEEF fee, which can increase as prices drop. The FY 2026 rate is $2.50/oz. The maximum is $60/oz.
N/A
6.625%
Up to 2% on each transfer (grower to processor, processor to retailer, and retailer to customer)
No, medical cannabis is not taxed
New Mexico
N/A
13% until July 2026; increases by 1% per year; maxes out at 18%
Gross receipts: 5.125% to 8.6875%, depending on location
Gross receipts varies by location
No. Medical was taxed pre-adult-use legalization but is no longer taxed.
New York
9%
9%
N/A
4%
No. Adult-use tax does not apply to medical, but medical is subject to a 7% excise tax on gross receipts.
Oregon
N/A
17%
N/A
Standard local taxes of up to 3%; some local cannabis- specific taxes
No, medical cannabis is not taxed.
Rhode Island
N/A
10%
7%
3%
No, standard sales tax and 4% medical cannabis tax apply.
Vermont
N/A
14%
6%
N/A
No, medical cannabis is not taxed.
Washington
N/A
37%
6.5%
Standard local taxes of up to 3.9%
Patients with medical cards are exempt from taxes.