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Sean Hocking
Right here’s what they are saying
Legalizing hashish for adults has been a sensible funding. Since 2014 when gross sales started in Colorado and Washington, legalization insurance policies have offered states a brand new income stream to bolster budgets and fund vital providers and packages. As of December 2021, states reported a mixed whole of $10.4 billion in tax income from authorized, adult-use hashish gross sales. Along with income generated for statewide budgets, cities and cities have additionally generated tons of of hundreds of {dollars} in new income from native adult-use hashish taxes.
Eighteen states have legal guidelines that legalize, tax, and regulate hashish for adults 21 and older (the 2020 voter-approved adult-use legalization regulation in South Dakota was overturned by the state’s Supreme Courtroom in November 2021). Eight of the legal guidelines had been authorised in 2020 or 2021, and in seven of these states, gross sales and tax collections haven’t but begun. This doc critiques every state’s adult-use hashish tax construction, inhabitants, and income from legalization. These figures don’t embody medical hashish tax income, software and licensing charges paid by hashish companies, extra revenue taxes generated by employees within the hashish business, or company taxes paid to the federal authorities.
Colorado (pop. 5.8 million) | Tax price: 15% wholesale, 15% particular retail
Colorado voters authorised an initiative to manage hashish for adults in November 2012, and on January 1, 2014, the state turned the primary with authorized adult-use gross sales. Colorado already had a developed medical hashish regulatory system, and lots of companies had been in a position to transition to having each a medical and an adult-use counter. Colorado has a strong medical program, with about 1.6% of the inhabitants enrolled. Colorado’s 15% wholesale excise tax and its 15% particular retail tax don’t apply to these gross sales. (The particular retail tax price was 10% till the legislature and governor elevated it in July 2017. Additionally, till July 2017, a 2.9% commonplace statewide gross sales tax was levied on hashish gross sales. At the moment, the usual gross sales tax is barely utilized to hashish equipment (e.g. pipes) and isn’t included within the totals beneath.)
As of November 2021, $471.9 million of the overall income generated from hashish taxes has been devoted to bettering Colorado’s public college system.1
The beneath figures don’t depend native gross sales tax revenues, which have been important. The town of Denver, for instance, applies an extra 5.5% native gross sales tax on adult-use hashish and has collected $237.5 million as of November 2021.2
12 months | Colorado State Tax Income from Grownup-Use Hashish3 |
2014 | $46,104,922 |
2015 | $104,759,961 |
2016 | $167,157,150 |
2017 | $220,688,951 |
2018 | $243,466,892 |
2019 | $279,155,047 |
2020 | $362,027,103 |
Jan. – Nov. 2021 | $367,778,689 |
Whole | $1,791,138,715 |
State Gross sales Tax Income from Grownup-Use Hashish (Colorado)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2014 | 46,104,922 |
2015 | 104,759,961 |
2016 | 167,157,150 |
2017 | 220,688,951 |
2018 | 243,466,892 |
2019 | 279,155,047 |
2020 | 362,027,103 |
Washington (pop. 7.6 million) | Tax price: 37% at retail since July 2015; 6.5% gross sales tax
Washington’s voters additionally authorised an adult-use measure in November 2012, and its first shops opened in July 2014. On the time, the state had an unregulated, arguably unlawful, medical hashish dispensary system, which was separate from the regulated adult-use program. This resulted in a slower ramp-up than in Colorado. Till July 2015, taxes had been fairly excessive — 25% at three factors of switch — making it exhausting to compete with unlawful gross sales. Along with altering the tax price to 37% in 2015, the legislature created a medical endorsement program to which adult-use shops might apply to affix.
Within the 2019 and 2020 fiscal years, state officers reported that income from the 37% hashish retail tax outpaced alcohol tax income, even if many extra adults eat alcohol than hashish.4 For each $1 billion in income collected from the hashish gross sales tax, practically $600 million is funneled into public well being initiatives, together with a fund that gives medical insurance for low-income households.5
The beneath figures don’t embody native taxes, which totaled an estimated $188.3 million from July 2014 via October 2021.6
12 months | Estimated Washington State Tax Income from Grownup-Use Hashish7 |
June – Dec. 2014 | $22,399,058 |
2015 | $159,451,910 |
2016 | $302,976,832 |
2017 | $397,358,420 |
2018 | $437,169,560 |
2019 | $477,310,790 |
2020 | $614,475,190 |
Jan. – Sept. 2021 | $480,851,220 |
Whole | $3,051,390,820 |
Estimated State Gross sales Tax Income from Grownup-Use Hashish (Washington)
12 months | Estimated State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2014 | 22,399,058 |
2015 | 159,451,910 |
2016 | 302,976,832 |
2017 | 397,358,420 |
2018 | 437,169,560 |
2019 | 477,310,790 |
2020 | 614,475,190 |
Oregon (pop. 4.2 million) | Tax price: 17% at retail
Oregon voters authorised an initiative regulating hashish for grownup use in November 2014, and the state’s first adult-use shops opened in October 2016. As well as, the legislature allowed medical hashish dispensaries to promote a restricted quantity of hashish (5 grams) to adults from October 2015 till December 31, 2016. These gross sales had been taxed at 25% starting January 4, 2016. The state’s medical sufferers (about 0.5% of Oregon’s inhabitants and dropping) should purchase hashish tax-free from adult-use shops.
Of the cannabis-related tax income it collects, the state distributes 40% to public faculties, 15% to regulation enforcement, and 25% to psychological well being and therapy packages.8
The beneath figures don’t embody the three% gross sales tax some localities impose. From February 2017 via August 2021, the native taxes collected totaled $86.1 million.9
12 months | Oregon State Tax Income from Grownup-Use Hashish10 |
Feb. – Dec. 2016 | $60,154,432 |
2017 | $68,646,246 |
2018 | $94,226,985 |
2019 | $115,915,277 |
2020 | $158,336,274 |
Jan. – Sept. 2021 | $138,232,915 |
Whole | $635,512,128 |
State Gross sales Tax Income from Grownup-Use Hashish (Oregon)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2016 | 60,154,432 |
2017 | 68,646,246 |
2018 | 94,226,985 |
2019 | 115,915,277 |
2020 | 158,336,274 |
Alaska (pop. 730,000) | Tax price: $50/ounce at wholesale
Alaska voters authorised an initiative to manage hashish for grownup use in November 2014, and the primary adult-use shops opened in October 2016.
Numerous elements initially resulted in slower income era than in another states. The state’s medical hashish program didn’t have dispensaries, that means there have been no hashish companies that would transition to adult-use cultivators and retailers. Because of a restricted provide, many shops closed for giant stretches of January 2017 or operated with diminished hours.11
Half of all adult-use hashish tax income is invested within the Recidivism Discount Fund and helps reentry packages for presently and previously incarcerated people.12
The beneath figures don’t embody extra tax some localities impose.
12 months | Alaska State Tax Income from Grownup-Use Hashish13 |
Oct. – Dec. 2016 | $232,696 |
2017 | $6,075,069 |
2018 | $15,697,268 |
2019 | $21,672,822 |
2020 | $27,205,435 |
Jan. – Oct. 2021 | $24,121,616 |
Whole | $95,004,906 |
State Gross sales Tax Income from Grownup-Use Hashish (Alaska)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2016 | 232,696 |
2017 | 6,075,069 |
2018 | 15,697,268 |
2019 | 21,672,822 |
2020 | 27,205,435 |
Nevada (pop. 3.1 million) | Tax price: 15% wholesale, 10% particular retail
Nevada voters authorised an initiative regulating hashish for grownup use in November 2016. The primary adult-use shops had been anticipated to be licensed in 2018, however the legislature and governor allowed medical hashish dispensaries to promote to adults starting on July 1, 2017.
A considerable piece of the 15% wholesale tax paid by hashish cultivators goes to native governments, whereas the rest is deposited into the state’s Distributive College Account to fund public training. The ten% hashish retail tax has added tons of of hundreds of thousands of {dollars} to the state’s wet day fund.
The beneath figures don’t depend commonplace state and native gross sales taxes.
12 months | Nevada State Tax Income from Grownup-Use Hashish14 |
July – Dec. 2017 | $30,376,795 |
2018 | $86,901,086 |
2019 | $107,440,859 |
2020 | $123,683,509 |
Jan. – Sept. 2021 | $123,142,398 |
Whole | $471,544,647 |
State Gross sales Tax Income from Grownup-Use Hashish (Nevada)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2017 | 30,376,795 |
2018 | 86,901,086 |
2019 | 107,440,859 |
2020 | 123,683,509 |
California (pop. 39.5 million) | Tax price: $9.25 per ounce for flowers or $2.75 on leaves/trim; 15% excise tax; 7.25% commonplace gross sales tax
California voters authorised an initiative regulating hashish for adults’ use in November 2016. The state’s first adult-use shops started to open in January 2018, however transition from the state’s unregulated, gray market medical hashish suppliers to a licensed and controlled system has been extra gradual than some anticipated. As well as, localities have been sluggish to ascertain rules, which has delayed the transition and diminished income.
In 2020, California collected greater than $1 billion in adult-use hashish tax income, a 62% enhance in comparison with 2019.
The voter-approved legalization regulation directs a good portion of its hashish tax revenues to native nonprofit packages that profit individuals adversely impacted by punitive drug legal guidelines. Greater than $100 million has already been distributed to group teams, with extra on the way in which.15 The state additionally invests massive chunks of hashish income into little one care providers and environmental packages.
The beneath figures don’t embody native gross sales and particular taxes established by municipalities throughout the state, which increase an estimated $85 million in extra tax {dollars} annually within the state.16
12 months | California State Tax Income from Grownup-Use Hashish17 |
2018 | $397,716,675 |
2019 | $638,579,351 |
2020 | $1,110,369,823 |
Jan. – Sept. 2021 | $976,811,788 |
Whole | $3,123,477,637 |
State Gross sales Tax Income from Grownup-Use Hashish (California)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2018 | 397,716,675 |
2019 | 638,579,351 |
2020 | 1,110,369,823 |
Massachusetts (pop. 6.9 million) | Tax price: 10.75% excise tax on gross sales; 6.25% commonplace gross sales tax
Massachusetts voters authorised an initiative regulating hashish for adults’ use in November 2016. Many anticipated gross sales to start in the summertime of 2018, however the first adult-use shops didn’t open till November 2018.
With adult-use hashish tax income collected to this point, the state has invested hundreds of thousands of {dollars} into public transportation and native governments.18
Massachusetts permits cities and cities to impose an extra gross sales tax as much as 3%. Figures beneath don’t embody these totals. As of October 2021, native hashish taxes offered an extra $62.5 million in income to cities and cities in Massachusetts.
12 months | Massachusetts State Tax Income from Grownup-Use Hashish19 |
Nov. – Dec. 2018 | $678,134 |
2019 | $66,243,027 |
2020 | $111,963,388 |
Jan. – Nov. 2021 | $205,645,201 |
Whole | $384,529,750 |
State Gross sales Tax Income from Grownup-Use Hashish (Massachusetts)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2018 | 678,134 |
2019 | 66,243,027 |
2020 | 111,963,388 |
Michigan (pop. 10 million) | Tax price: 10% excise tax on gross sales; 6% commonplace gross sales tax
Michigan voters authorised an initiative to legalize and regulate hashish for adults’ use in November 2018. Gross sales started in December 2019, however localities have been sluggish to choose in and set up rules, which delays the transition from the illicit market. Detroit opted in on November 24, 2020.
For adult-use hashish taxes collected in Fiscal 12 months 2020, the Michigan Division of Treasury reported in March 2021 that, “[a]aspect from the practically $10 million in disbursements to municipalities and counties, round $11.6 million will likely be despatched to the College Assist Fund for Okay-12 training and one other $11.6 million to the Michigan Transportation Fund, upon appropriation. The remaining $12.5 million quantity will likely be used towards start-up and administrative prices.”20
12 months | Estimated Michigan State Tax Income from Grownup-Use Hashish21 |
Dec. 2019 | $1,118,289 |
2020 | $81,705,350 |
Jan. – Nov. 2021 | $188,306,010 |
Whole | $271,129,649 |
Estimated State Gross sales Tax Income from Grownup-Use Hashish (Michigan)
12 months | Estimated State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2019 | 1,118,289 |
2020 | 81,705,350 |
Illinois (pop. 12.7 million) | Tax price: 7% at wholesale; from 10-25% at retail, relying on efficiency; 6.25% commonplace gross sales tax
On June 25, 2019, Gov. J.B. Pritzker signed HB 1438 into regulation, legalizing and regulating hashish for adults’ use. Gross sales from present medical hashish companies started on January 1, 2020.
Illinois’ regulation places a robust emphasis on social fairness and repairing harms attributable to enforcement of legal guidelines that criminalized hashish. Along with investing 20% of adult-use hashish tax income into psychological well being providers, the state directs 25% of the funds to the Recuperate, Reinvest, and Renew Program, which helps native organizations in growing packages that profit deprived communities.
12 months | Illinois State Tax Income from Grownup-Use Hashish22 |
2020 | $175,054,982 |
Jan. – Nov. 2021 | $387,695,992 |
Whole | $562,750,974 |
State Gross sales Tax Income from Grownup-Use Hashish (Illinois)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2020 | 175,054,982 |
Maine (pop. 1.3 million) | Tax price: Wholesale tax of $335 per pound with decrease charges for trim and seedlings; 10% gross sales tax
Maine voters authorised an initiative regulating hashish for adults’ use in November 2016, however gross sales didn’t start till October 9, 2020.
The state’s legalization regulation divides hashish tax income into two funds, one to assist public well being initiatives and the opposite for public security and regulation enforcement coaching.
12 months | Maine State Gross sales Tax Income from Grownup-Use Hashish23 |
Oct. – Dec. 2020 | $1,156,878 |
Jan. – Nov. 2021 | $11,906,326 |
Whole | $13,063,204 |
State Gross sales Tax Income from Grownup-Use Hashish (Maine)
12 months | State Gross sales Tax Income from Grownup-Use Hashish |
---|---|
2020 | 1,156,878 |
Vermont (pop. 620,000) | Tax price: 14% excise tax on gross sales; 6% commonplace gross sales tax
On October 7, 2020, Gov. Phil Scott (R) allowed S. 54 to enter regulation with out his signature. The regulation legalizes, regulates, and taxes hashish gross sales for adults’ use. The legislature and governor had legalized private possession and cultivation solely in 2018. Regulated gross sales are scheduled to start on Could 1, 2022.
Vermont’s regulation requires that hashish tax income be “used to fund a grant program to begin or increase afterschool and summer season studying packages, with a deal with growing entry in underserved areas.”
Arizona (pop. 7.3 million) | Tax price: 16% excise tax on gross sales; 5.6% commonplace transaction privilege tax
Arizona voters authorised an initiative regulating hashish for adults’ use on November 3, 2020. Gross sales from present medical hashish companies started on January 21, 2021.
After regulatory and enforcement prices are paid, Arizona’s regulation distributes a 3rd of the hashish tax income to group faculties, together with 10% to public well being and legal justice packages.24
12 months | Arizona State Gross sales Tax Income from Grownup-Use Hashish25 |
Jan. – Oct. 2021 | $121,463,757 |
Whole | $121,463,757 |
Montana (pop. 1.1 million) | Tax price: 20% excise tax on gross sales
Montana voters authorised an initiative regulating hashish for adults’ use on November 3, 2020. Gross sales started in January 2022.
The legalization implementation invoice signed by the governor in Could 2021 directs hashish income to substance abuse restoration packages, conservation efforts, and providers for veterans and their households.
New Jersey (pop. 8.9 million) | Tax price: 6.625% commonplace gross sales tax, 1-2% native possibility taxes; fluctuating excise price based mostly on common sale value
On November 3, 2020, greater than two-thirds of New Jersey voters authorised a constitutional modification directing the legislature and the Hashish Regulatory Fee to manage hashish for adults’ use. Gross sales haven’t but begun.
In March 2021, lawmakers authorised twin payments to implement the modification. Along with the usual gross sales taxes and native hashish taxes, New Jersey’s regulation imposes excise charges on gross sales from cultivators, which regulators can regulate annually. The cultivation excise charges would begin at one-third of 1 % of common retail gross sales costs. Starting 9 months after adult-use gross sales start, and yearly thereafter, the Hashish Regulatory Fee might revise the charges, with charges growing as the typical retail value of hashish drops. The Fee might levy excise charges on the following charges:
- as much as $10 per ounce when common retail costs per ounce are $350 or larger;
- as much as $30 per ounce when common retail costs per ounce are no less than $250 however lower than $350;
- as much as $40 per ounce when common retail costs per ounce are no less than $200 however lower than $250; and
- as much as $60 per ounce when common retail costs drop beneath $200 per ounce.
Taxes from New Jersey’s authorized hashish market will largely assist targets to advertise social fairness. The regulation requires 70% of hashish revenues to offer financial help and providers to “impression zones,” that are areas of the state disproportionately affected by prior enforcement of hashish criminalization legal guidelines.
New York (pop. 19.5 million) | Tax price: 9% hashish gross sales tax; 4% native gross sales tax; for distributors, a efficiency tax on THC of $0.005/mg for flower, $0.008/mg for concentrates, and $0.03/mg for edibles
On March 31, 2021, Gov. Andrew Cuomo signed laws (S.854-A/A.1248-A) legalizing hashish for adults in New York. Gross sales haven’t but begun.
After regulatory and administrative prices, 40% of hashish income will go to group reinvestment grants, 20% will go to public faculties, and 40% will assist drug therapy and public well being packages.
New Mexico (pop. 2.1 million) | Tax price: 12% retail excise till July 1, 2025, which then will increase by one proportion level per 12 months, maxing out at 18% on July 1, 2030; 5.125% to eight.6875% gross receipts tax (which varies relying on the placement within the state)
New Mexico’s Hashish Regulation Act legalizes and regulates hashish for adults 21 and older. It handed the legislature on March 31, 2021 throughout a particular session known as for that function by Gov. Michelle Lujan Grisham. Gov. Grisham signed the invoice on April 12, 2021. Gross sales haven’t but begun.
A lot of the hashish excise tax income will go to the municipal governments the place gross sales happen. Future finances payments will embody extra income distribution. They’re anticipated to incorporate funding for group reinvestment.
Virginia (pop. 8.5 million) | Tax price: 21% retail gross sales tax; 6% commonplace gross sales tax; elective native gross sales tax as much as 3%
On April 7, 2021, the Virginia Basic Meeting voted to approve amendments proposed by Gov. Ralph Northam that made the adult-use legalization regulation take impact on July 1, 2021.
After overlaying regulatory prices, hashish tax income will likely be allotted to pre-Okay training for at-risk youngsters (40%); a Hashish Fairness Reinvestment Fund (30%); substance abuse therapy and prevention (25%); and public well being packages (5%). Gross sales are scheduled to start in January 2024, however the legislature might velocity up — or stall — implementation.
Connecticut (pop. 3.6 million) | Tax price: THC-based excise tax: $0.00625 per milligram of THC in flower hashish; $0.0275/mg of THC in edibles; $0.009 /mg of THC in different hashish merchandise; 6.35% commonplace gross sales tax; 3% tax to the municipality the place the gross sales occurred
On June 22, 2021, Gov. Ned Lamont signed S.B. 1201 — “An Act In regards to the Equitable and Accountable Regulation of Hashish” — into regulation, after it handed the Connecticut Home and Senate.
Beginning on July 1, 2023 and thereafter, 25% of the excise tax will go to the Prevention and Restoration Providers Fund. From July 1, 2023 till June 30, 2026, 60% of the excise tax would go to the Social Fairness and Innovation Fund. On July 1, 2026, that might enhance to 65%. Starting on July 1, 2028, it could enhance once more and would stay at 75%.
The three% tax that goes to municipalities should be used for one among 5 particular functions, similar to re-entry providers, psychological well being or dependancy providers, youth providers bureaus, and streetscape enhancements close to hashish retailers.
Gross sales are anticipated to start in 2022.
1 https://cdor.colorado.gov/data-and-reports/marijuana-data/marijuana-tax-reports
2 https://www.denvergov.org/Government/Departments/Marijuana-Information-Office/Data-and-Statistics
3 https://cdor.colorado.gov/data-and-reports/marijuana-data/marijuana-tax-reports
4 https://dor.wa.gov/sites/default/files/legacy/docs/reports/2020/Tax_Statistics_2020/Table1.pdf
5 https://crosscut.com/news/2021/02/how-1-billion-pot-taxes-gets-spent-washington-state
6 https://dor.wa.gov/about/statistics-reports/recreational-and-medical-marijuana-taxes
7 Month-to-month excise tax information: https://www.502data.com/ (for information previous to 2017); Month-to-month gross sales tax information and excise tax estimates based mostly on gross sales quantity offered right here: https://dor.wa.gov/about/statistics-reports/recreational-and-medical-marijuana-taxes
9 https://www.oregon.gov/DOR/programs/gov-research/Pages/research-marijuana.aspx
10 Ibid.
11 Laurel Andrews, “Authorized weed is tough to come back by in Alaska,” Alaska Dispatch Information, January 5, 2017.
12 https://tax.alaska.gov/programs/programs/reports/Annual.aspx?60000&Year=2020
13 http://tax.alaska.gov/programs/programs/reports/index.aspx?60000
14 https://tax.nv.gov/Publications/Marijuana_Statistics_and_Reports/
17 https://www.cdtfa.ca.gov/dataportal/dataset.htm?url=CannabisTaxRevenues
19 https://cthru.data.socrata.com/dataset/Total-Tax-Revenue-Collections/me5t-fei2
21 https://www.michigan.gov/lara/0,4601,7-154-89334_79571_93032-497635–,00.html
22 See the “Hashish” tab of the reviews linked on this webpage: https://www2.illinois.gov/rev/research/taxstats/CollectionsComptroller/Pages/default.aspx
23 E-mail correspondence dated January 3, 2022 with David Gunter of Maine Income Providers.
24 https://www.azleg.gov/jlbc/20novI-23-2020fn730.pdf
25 https://azdor.gov/reports-statistics-and-legal-research/marijuana-tax-collection
https://www.mpp.org/issues/legalization/cannabis-tax-revenue-states-regulate-cannabis-adult-use/
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