FOR IMMEDIATE RELEASE
Thursday, June 18, 2026
Contact: Violet Cavendish
[email protected]
Washington, D.C. — States have generated a combined total of more than $28.4 billion in tax revenue from legal adult-use cannabis sales since the first markets launched in Colorado and Washington in 2014, according to a comprehensive new state-by-state report published by the Marijuana Policy Project (MPP).
In 2025 alone, legalization states collectively generated more than $4.57 billion in cannabis tax revenue from adult-use sales, which is the most revenue generated by cannabis sales in a single year. Further, seven states collected over $200 million in adult-use cannabis taxes. Three of those states — California, Illinois, and Michigan — generated over $500 million in revenue, one of which (California) collected over $1 billion.
“At a time when pressure is building on state budgets, adult-use cannabis taxes are providing relief,” said Adam J. Smith, Executive Director at the Marijuana Policy Project. “Legal adult-use markets have become powerful economic engines, creating thousands of new jobs and small business opportunities across the country. While economic growth and state revenues aren’t the primary reasons for legalizing adult-use cannabis, the positive financial impact is undeniable. That said, it is important to keep in mind that overtaxing legal cannabis can be self-defeating, driving consumers back to the unregulated, unsafe, and untaxed illicit market, which is bad for state budgets and for public health and safety. More importantly, ending prohibition has spared hundreds of thousands of individuals the trauma of arrest and incarceration, while data shows teen cannabis use rates have actually decreased in most legal states.”
Currently, 24 states and the District of Columbia have legalized cannabis possession for adults 21 and older. With the exception of Virginia and D.C., all have legalized, regulated, and taxed cannabis sales.
Notably, states with legal, adult-use cannabis sales have allocated tax revenues to a variety of needs, including their General Funds and specific services and programs. Cannabis taxes have provided funding for Medicaid, education, school construction, housing, roads, early literacy, bullying prevention, behavioral health, alcohol and drug treatment, veterans’ services, conservation, job training, conviction expungement expenses, and reinvestment in communities that have been disproportionately affected by the war on cannabis, among many others.
MPP’s report reviews each legalization state’s adult-use cannabis tax structure, population, and year-by-year adult-use cannabis tax revenue in chronological order, based on when state-legal cannabis sales began. These figures include cannabis excise taxes and states’ standard sales taxes that are applied to cannabis. They do not include medical cannabis tax revenue.
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Founded in 1995, the Marijuana Policy Project (MPP) is the nation’s leading cannabis policy reform organization. MPP has played a central role in passing dozens of cannabis policy reforms in states across the country, including 14 successful cannabis legalization campaigns, and also works to advance federal reforms.