State Cannabis Taxes and Legal Status: November 2023

The legislature passed and governor approved a bill in 2021 that legalized medical cannabis.

Legalization was approved with Ballot Measure 2 in 2014. The first cultivation license was granted in July 2016, with retail sales beginning in October 2016.
Taxes:
Excise tax of $50/ounce for flowers
Excise tax of $15/ounce for stems and leaves
Excise tax of $25/ounce for immature flowers/buds (added 10/2018)
Revenue Information:
FY 2017 Revenues $1.7 million.
Agencies Administering:
Licensing and Tracking: Marijuana Control Board https://www.commerce.alaska.gov/web/AMCO
Tax Administration: Alaska Dept. of Revenue http://tax.alaska.gov/

Arizona Proposition 207, Marijuana Legalization Initiative, was approved on the 2020 ballot. Licensing of retail establishments began January 16, 2021.
Taxes:
16 percent tax on marijuana sales, in addition to the existing transaction privilege tax and use tax
Agencies Administering:
Arizona Department of Health Services (DHS) is responsible for adopting rules to regulate marijuana, including the licensing of marijuana retail stores, cultivation facilities, and production facilities. https://www.azdhs.gov
Taxes administered by the Department of Revenue https://azdor.gov/

The Arkansas Marijuana Legalization Initiative to legalize recreational marijuana was not passed in the 2022 general election. However, medical marijuana continues to be legal.

Legalization was approved with Proposition 64 in 2016. Personal use and growth were legal beginning in November 2016. Retail sales began January 2018.
Taxes:
Excise tax of 15% of Retail Sales
State retail sales tax applies (7.25% plus local taxes) notes, medical marijuana was exempted from the state sales tax on November 2016 by Prop. 64.
Beginning January 1, 2023, the cultivation tax is discontinued.
Revenue Information:
FY 2018 Revenues (two quarters) $134 million.
Agencies Administering:
Tracking and Licensing: Dept. of Cannabis Control https://cannabis.ca.gov
Tax Administration: California Dept. of Tax and Fee Administration https://www.cdtfa.ca.gov/

Legalization began when voters approved Constitutional Amendment 64 in 2012. Colorado became the first state to begin legal sales when retail stores opened in January 2014.
Taxes:
Excise Tax of 15% of Average Market Rate, sales to retail stores
Retail Tax of 15% (10% before July 2017) – local government receive 10% of this tax.
(2.9% retail sales tax before July 2017)
Local Option Retail Tax up to 8%
Revenue Information:
FY 2018 State Revenues $251 million
Agencies Administering:
Tracking, Licensing and Taxes: Colorado Dept. of Revenue https://www.colorado.gov/pacific/enforcement/marijuanaenforcement
Revenue and Sales Data https://www.colorado.gov/pacific/revenue/colorado-marijuana-sales-reports

The governor has signed SB 1201 providing for the possession and retail sales of recreational marijuana. Possession of up to 1.5 ounces began July 1, 2021. Retail sales began January 10, 2023.
Taxes:
Excise Tax of 0.625 cents per milligram of THC for cannabis flower
0.9 cents per milligram for other product types
2.75 cents per milligram for edibles
6.35% retail sales tax plus 3% municipal sales tax
Agencies Administering:
Tracking, Licensing and Taxes: Connecticut Department Consumer Protection https://portal.ct.gov/DCP
Tax Collections: Connecticut Department of Revenue Services https://portal.ct.gov/DRS

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Medical cannabis oil with up to 5% THC is legal.

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The Idaho Attorney General delivered the 2015 opinion that CBD containing 0% THC is permissible as long as it is derived from one of the five identified (non-flower) parts of the cannabis plant.

Bipartisan bill H.B. 1438, which the General Assembly passed May 31, 2019 allowed adults 21 and older to buy marijuana from licensed dispensaries starting January 1, 2020. Pritzker signed the bill June 25, 2019.
Taxes:
7% Tax on Sales to Dispensaries
Retail Excise Taxes —
10% on marijuana with THC level of 35% or less
20% on cannabis-infused products
25% for marijuana with THC level above 35%
Local option tax up to 3% [7/1/2020]
Agencies Administering
Tracking and Licensing [Illinois Dept. of Financial & Professional Regulation] https://www.idfpr.com/ILCannabis.asp
Taxes: Illinois Dept. of Revenue Cannabis Information Page https://tax.illinois.gov/

CBD oil containing no more than 0.3 percent THC is legal.

Medical cannabis oil is legal. Effective July 1, 2020, the law allows products with a total of 4.5 grams of THC every 90 days, with some exceptions where a greater quantity is needed.

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Governor Beshear signed Senate Bill 47 on March 31, 2023, allowing the legal use and sale of medical marijuana in Kentucky.

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Voters approved marijuana legalization with the Ballot Question 1 in 2016. This allowed possession and individuals to grow marijuana beginning on January 30, 2017. On May 2, 2018, the Legislature overrode the Governor’s veto of LD 1719, An Act to Implement a Regulatory Structure for Adult Use Marijuana. Retail sales began on October 9, 2020.
Taxes:
Excise tax of $335 per pound – flower
Excise tax of $94 per pound – trim
Excise tax of $1.50 per seedling
Excise tax of $0.35 per seed
Retail sales tax of 10%
Agencies Administering:
Tracking and Licensing: Office of Cannabis Policy – Maine Department Administrative and Financial Services https://www.maine.gov/dafs/
Taxes: Maine Revenue Service https://www.maine.gov/revenue/

On November 8, 2022, Maryland voters approved Question 4. Question 4 legalized the use, distribution, regulation, and taxation of marijuana for adults 21 years of age or older starting in July 2023.
Agencies Administering:
Tracking and Licensing: Maryland Cannabis Administration https://mmcc.maryland.gov/
Taxes: Comptroller of Maryland – www.marylandtaxes.gov/

Legalization was approved with Ballot Question 4 in 2016. While the ballot question set January 2018 as the date for retail sales to begin, legislation H 3818 delayed first sales until after July 1, 2018 and set various tax rates. It also created a Cannabis Control Commission with 5 appointed members. The first cultivation license was issued on June 21, 2018, and the first retail store opened on November 20, 2018.
Taxes:
10.75% Excise Tax on Retail sales (initially 3.75% on ballot)
6.25% Retail Sales Tax applies
Local Option Excise Tax of up to 3% is permitted (initially 2% on ballot)
Agencies Administering:
Tracking and Licensing: Massachusetts Cannabis Control Commission https://mass-cannabis-control.com/
Taxes: Massachusetts Dept. of Revenue https://www.mass.gov/marijuana-retail-taxes

Voters approved Ballot Proposal 1 in the 2018 election authorizing the cultivation, distribution and retail sales of recreational marijuana. State policymakers now need to approve legislation to implement the proposal. Details on taxes and regulation will be spelled out in future legislation. Legal retail sales began on December 6, 2019.
Taxes:
10% Retail Excise Tax
6% State Sales Tax (effective February 6, 2020)
Agencies Administering:
Tracking and Licensing: Michigan Dept. of Licensing and Regulatory Affairs www.michigan.gov/lara/
Taxes: To Be Administered by the Michigan Department of Treasury www.michigan.gov/treasury

On May 30, 2023, a bill was signed to legalize the sale and use of recreational cannabis in Minnesota. Starting July 1, 2023, all sellers of taxable cannabis products must register with the Minnesota Department of Revenue to remit the new Cannabis Tax.
Taxes:
10% Retail Excise Tax
6.875% State Sales Tax
Local Sales Tax
Agencies Administering:
Tracking and Licensing: Minnesota Office of Cannabis Management
www.cannabis.state.mn.us
Taxes: Minnesota Department of Revenue
www.revenue.state.mn.us/cannabis-tax

SB 2095 created the Mississippi Medical Cannabis Act this will legalize medical marijuana.

Missouri voters approved the Marijuana Legalization Initiative. This legalizes the purchase, purchase, possession, consumption, use, delivery, manufacturing, and sale of marijuana for personal use for persons who are 21 years old or older. Additionally, it allows individuals convicted of non-violent marijuana-related offenses to petition to be released from incarceration and/or have their records expunged. Retail sales began February 3, 2023.
Taxes:
16% sales tax on the retail sale of marijuana
Agencies Administering:
Tracking and Licensing: Missouri Department of Health & Senior Services
health.mo.gov
Taxes: Missouri Department of Revenue – dor.mo.gov

Montana I-190, Marijuana Legalization and Tax Initiative, was approved on the 2020 ballot. Retail sales began in 2022.
Taxes:
Marijuana and marijuana-infused products would be taxed at 20% of retail price.
Local option up to 3%.
Medical marijuana taxed at 4% of retail price.
Agencies Administering:
The Montana Department of Revenue would be responsible for regulating the cultivation, manufacture, transport, and sale of marijuana in Montana. https://mtrevenue.gov/

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Legal sales of Marijuana were approved by the voters with Ballot Question 2 in 2016. While the Ballot Question setup January 1, 2017 as the start date for retail sales, the Dept. of Taxation approved regulations allowing sales to begin on July 1, 2017. Due to supply conditions, the Department temporarily permitted medical facilities to sell recreational marijuana.
Taxes:
Wholesale Excise Tax 15% [Fair Market Value determined by DOT], also applied to medical marijuana
Retail Tax 10%
Sales tax imposed 6.85% (plus local)
Agencies Administering:
Tracking and Licensing: Nevada Cannabis Compliance Board http://marijuana.nv.gov/
Taxes: Nevada Department of Taxation – tax.nv.gov

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The New Jersey Marijuana Legalization Amendment was approved on the 2020 ballot. Retail sales began April 21, 2022.
Taxes:
The ballot measure would apply the state sales tax (6.625 percent) to recreational marijuana.
A Social Equity Excise Fee of $1.52 per ounce of cannabis.
The state Legislature would be authorized to allow local governments to enact an additional 2 percent sales tax on recreational marijuana.
Agencies Administering:
Licensing: Cannabis Regulatory Commission (CRC), https://www.nj.gov/cannabis/
Taxes: Division of Taxation https://www.nj.gov/treasury/taxation/

The governor recently signed HB 2 which provides for the retail sales of recreational marijuana beginning April 2022.
Taxes:
Excise tax of 12% of Retail Sales [tax rate will increase annually beginning in 2025 to 18%]
Retail sales tax applies
Agencies Administering:
The Cannabis Control Division (CCD) in the Regulation & Licensing Department will regulate and issue licenses for cannabis producers and retailers. https://www.rld.nm.gov/cannabis/
The Taxation and Revenue Department will collect and administer the Cannabis Excise and Gross Receipts [sales] Taxes. https://www.tax.newmexico.gov

The legislature has approved and the Governor signed S. 854 which allows for recreational marijuana. Retail sales began December 29, 2022.
Taxes:
A tax of 0.5 cent/milligram of THC in Flower
A tax of 0.8 cent/milligram of THC in Consentrate
A tax of 0.3 cent/milligram of THC in Edibles
A Retail Tax of 9% plus a statewide 4% local tax
Agencies Administering:
Licensing & Regulation: Office of Cannabis Management (OCM) https://cannabis.ny.gov/licensing
Taxes: New York State Department of Taxation and Finance https://www.tax.ny.gov/bus/auc/

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On November 7, 2023, Issue 2 passed which legalizes and regulates recreational marijuana for adults aged 21 and above, including cultivation, processing, sale, purchase, possession, and home growth. Legal retail sales begin Aug. 6, 2024.

Taxes:
10% Retail Sales Tax
Agencies Administering:
Tracking and Licensing: the initiative would create the Division of Cannabis Control for regulation and licensing of marijuana operators and facilities.

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Voters approved Initiative Measure 91 in 2014 that legalized recreational marijuana allowing possession of up to 8 ounces and four plants. It also required the Liquor Control Commission to regulate sales. Legislation was approved in the 2015 session that allowed retail sales to begin on October 1, 2015, initially through medical dispensaries on a temporary basis. Recreational marijuana retail licenses were granted beginning October 1, 2016.
Taxes:
17% Retail Sales Tax
A temporary 25% tax was imposed on Medical Dispensary sales January – December 2016.
Local Option sales tax up to 3%
Agencies Administering:
Tracking and Licensing: Oregon Liquor Control Commission https://www.oregon.gov/olcc/Pages/index.aspx
Taxes: Oregon Dept. of Revenue https://www.oregon.gov/DOR/Pages/index.aspx

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The Governor signed legislation to allow the retail sales of recreational marijuana. Retail sales began December 1, 2022.
Taxes:
10% Excise Tax
3% Local Excise Tax
7% State Sales Tax
Agencies Administering:
Tracking and Licensing: Rhode Island Office Of Cannabis Regulation https://dbr.ri.gov
Taxes: Rhode Island Division of Taxation https://tax.ri.gov

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In the 2022 General Election, South Dakota voters decided against Measure 27 to legalize possession, distribution, and use of recreational marijuana. Medical Marijuana legalization still goes into effect.

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Medical cannabis oil is legal.

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On Oct. 7, 2020, S. 54 became law, authorizing retail sales of recreational marijuana beginning October 1, 2022.
Taxes:
Cannabis Excise Tax – 14% of Retail Price
6% State Sales Tax
Local Sales Tax option
Agencies Administering:
Licensing: Cannabis Control Board (CCB), https://ccb.vermont.gov
Taxes: Department of Taxes, https://tax.vermont.gov

The legislature approved and the governor signed SB 1406 (HB 2312) which legalizes possession and allows for the retail sales of marijuana. Legal possession of one ounce or less is allowed beginning July 1, 2021, and retail sales begins January 1, 2024.
Taxes:
Retail sales tax of 21% for all products sold through Marijuana stores
A 3% local options sales tax may also apply
Agencies Administering:
Virginia Cannabis Control Authority, https://www.cannabis.virginia.gov

Voters approved Measure Initiative 502 in 2012 which legalized the possession, distribution and sales of marijuana. It required the State Liquor Control Board to regulate and tax the retail sale of Marijuana. Legislation in 2015 (H 2136) changed the tax rate (from 25% wholesale and retail tax) to the current 37% rate and changed the name to the Washington State Liquor and Cannabis Board. Retail sales began July 2014, with Washington became the second state to permit retail sales of recreational marijuana. Note, medical dispensaries were required to obtain a retail license after June 2016.
Taxes:
37% Tax on Retail Sales
6.5% Retail Sales Tax (plus local tax) [medical is exempt from sales taxes after June 2016]
Agencies Administering:
Tracking, Licensing and Taxes: Washington State Liquor and Canabis Board https://lcb.wa.gov/

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CBD products that contain less than 0.3% THC by weight are legal to use and possess.

Medical and recreational marijuana are legal. Voters approved Ballot Initiative 71 in 2014 that allowed possession of less than two ounces of marijuana. However, Federal law does NOT permit the cultivation, distribution and retail sales of Marijuana.

Legal for medical purposes since 2015 and legal for recreational purposes since April 2019. Passing via a ballot referendum in 2014.

On September 21, 2018 Gov. Ralph Torres legalized recreational cannabis consumption for adults (over age 21), and medical use of cannabis.