Table 7.22

State Cannabis Taxes and Legal Status: December 2022


  Cannabis legality  
FIPS State or other
jurisdiction
Medical Recreational CBD* Hemp
cultivation*
Other (notes, taxes, agencies, revenues and upcoming ballot initiatives)
01AlabamaYesNoRestrictionsYes

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

02AlaskaYesYesYesYes

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/

04ArizonaYesYesYesYes

Arizona Proposition 207, Marijuana Legalization Initiative, was approved on the 2020 ballot. Licensing of retail establishments began January 16, 2021.
Taxes:
Proposition 207 would place a 16% tax on marijuana sales, in addition to the existing transaction privelege tax and use tax.
Agencies Administering:
Arizona Department of Health Services 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

05ArkansasYesNoYesYes

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

06CaliforniaYesYesYesYes

Legalization was approved with Proposition 64 in 2016. Personal use and growth were legal beginning in November 2016. Retail sales began January 2018.
Taxes:
Cultivation Tax of $9.25/ounce for flowers [$9.65 after 1/1/20]
$2.75/ounce for leaves [$2.87 after 1/1/20]
Fresh plant material $1.29/ounce [$1.35 after 1/1/20]
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.
Revenue Information: FY 2018 Revenues (two quarters) $134 million.
Agencies Administering:
Tracking and Licensing – CalCannabis Cultivations Licensing (CA Dept. of Food & Agriculture); http://calcannabis.cdfa.ca.gov/
Tax Administration – California Dept. of Tax and Fee Administration: https://www.cdtfa.ca.gov/

08ColoradoYesYesYesYes

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 Department of Revenue https://www.colorado.gov/pacific/enforcement/marijuanaenforcement
Revenue and sales data – https://www.colorado.gov/pacific/revenue/colorado-marijuana-sales-reports and https://www.colorado.gov/pacific/revenue

09ConnecticutYesYesYesYes

The governor has signed SB 1201 providing for the possession and retail sales of recreational marijuana. Possession of up to 1.5 ounces will be allowed beginning July 1, 2021. Retail sales are expected to begin by the end of 2022.
Taxes:
Excise tax of 0.625 cents per milligram of THC for cannabis flower
Excise tax of 0.9 cents per milligram for other product types
Excise tax of 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

10DelawareYesNoYesYes

Medical marijuana is legal.

12FloridaYesNoYesYes

Upcoming Ballot Initiatives:
Florida Marijuana Legalization Initiative (2022)
Florida Marijuana Legalization and Medical Marijuana Treatment Center Sales Initiative (2022)
Florida Medical Marijuana Plants Initiative (2022)
Florida Medical Marijuana for Mental Health Disorders Initiative (2022)

13GeorgiaNoNoRestrictionsYes

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

15HawaiiYesNoYesNo

Medical marijuana is legal.

16IdahoNoNoRestrictionsNo

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.

17IllinoisYesYesYesYes

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.
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 Department of Revenue Cannabis Information Page: https://www2.illinois.gov/rev/research/taxinformation/other/Pages/Cannabis-Taxes.aspx

18IndianaNoNoRestrictionsYes

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

19IowaNoNoRestrictionsYes

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.

20KansasNoNoRestrictionsYes
21KentuckyNoNoRestrictionsYes

Medical cannabis oil is legal. In February 2020, the Kentucky House passed a medical cannabis bill, HB 136. Due to the COVID-19 pandemic, the Senate chose not to focus on the issue before their April 2020 adjournment.

22LouisianaYesNoYesYes

Medical marijuana is legal.

23MaineYesYesYesYes

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 Marijuana Policy – Maine Department of Administrative and Financial Services https://www.maine.gov/dafs/
Taxes – Maine Revenue Service https://www.maine.gov/revenue/

24MarylandYesYesYesYes

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.

25MassachusettsYesYesYesYes

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 Department of Revenue https://www.mass.gov/marijuana-retail-taxes

26MichiganYesYesYesYes

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 https://www.michigan.gov/lara/0,4601,7-154-89334_79571_90056—,00.html
Taxes – To Be Administered by the Michigan Department of Treasury https://www.michigan.gov/treasury
The Department released Bulletin 2019-17 discussing collections of retail excise tax.

27MinnesotaYesNoYesYes

Medical marijuana is legal.

28MississippiYesNoRestrictionsNo

SB 2095 created the Mississippi Medical Cannabis Act this will legalize medical marijuana.
Upcoming Ballot Initiatives:
1. Mississippi Marijuana Legalization, Criminal Record Expungement, and Firearm Possession for Non-Violent Felons Amendment (2022)
2. Mississippi Marijuana Legalization Amendment (2022)

29MissouriYesNoYesYes

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.
Taxes:
6% sales tax on the sale of Marijuana

30MontanaYesYesYesYes

Montana I-190, Marijuana Legalization and Tax Initiative, was approved on the 2020 ballot. Retail sales to begin in 2022. Gov. Gianforte signed House Bill 701 implementing and regulating the program approved by voters.
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. It would begin accepting marijuana provider and dispensary applications by January 1, 2022. https://mtrevenue.gov/

31NebraskaNoNoNoYes
32NevadaYesYesYesYes

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, Licensing and Taxes – Nevada Dept. of Taxation: http://marijuana.nv.gov/

33New HampshireYesNoYesNo

Medical marijuana is legal.

34New JerseyYesYesYesYes

The New Jersey Marijuana Legalization Amendment was approved on the 2020 ballot. The constitutional amendment took effect on January 1, 2021.
Taxes:
Ballot measure would apply the state sales tax (6.625 percent) to recreational marijuana but prohibit additional state sales taxes.
A Social Equity Excise Fee applies at 0.3% for purchases ranging from $10 to $40 per ounce. The tax rate is set by the Cannabis Regulatory Commission (CRC).
The state legislature would be authorized to allow local governments to enact an additional 2 percent sales tax on recreational marijuana.
Agencies Administering:
The five-member Cannabis Regulatory Commission, which was first established to oversee the state’s medical marijuana program, would be responsible for regulating the cultivation, processing and sale of recreational marijuana.

35New MexicoYesYesYesYes

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
Retail sales tax applies
Agencies Administering:
The legislation creates a Cannabis Control Division of the Regulation and Licensing Department of administer licenses and collect taxes.

36New YorkYesYesYesYes

The legislature approved and the governor signed S. 854 which allows for recreational marijuana sales beginning April 1, 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:
Tracking, licensing and taxes – New York State Department of Taxation and Finance – https://www.tax.ny.gov/.

37North CarolinaNoNoRestrictionsYes
38North DakotaYesNoYesYes

Medical marijuana is legal.

39OhioYesNoYesNo

Medical marijuana is legal.

40OklahomaYesNoYesYes

Medical marijuana is legal.

41OregonYesYesYesYes

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 Department of Revenue: https://www.oregon.gov/DOR/Pages/index.aspx

42PennsylvaniaYesNoYesYes

Medical marijuana is legal.

44Rhode IslandYesYesYesYes

The Governor signed legislation to allow the retail sale of recreational marijuana. Retail sales stated on December 1, 2022.
Taxes:
10% Excise tax
3% Local Excise Tax
7% State Sales Tax
Agencies Administering:
Tracking and Licensing – Rhode Island Cannabis Control Commission (to be created)
Taxes – Rhode Island Division of Taxation – https://tax.ri.gov

45South CarolinaNoNoRestrictionsYes
46South DakotaYesNoNoYes

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

47TennesseeNoNoRestrictionsYes
48TexasNoNoRestrictionsYes

Medical cannabis oil is legal.

49UtahYesNoYes

Medical marijuana is legal.

50VermontYesYesYesYes

In September 2020, the legislature approved S. 54 and it was signed by the governor in October 2020. It authorizes retail sales of recreational marijuana beginning October 1, 2022.
Taxes:
Cannabis Excise Tax – 14% of retail price
State sales tax
Agencies Administering:
Licensing and Tracking – The Cannabis Control Board (3-member board to be created)
Taxes – Department of Taxes: https://tax.vermont.gov/

51VirginiaYesYesRestrictionsYes

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 will be allowed July 1, 2021, while retail sales will begin 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 will be created and issue regulations by July 1, 2023.

53WashingtonYesYesYesYes

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 Cannabis Board: https://lcb.wa.gov/

54West VirginiaYesNoYesYes

Medical marijuana is legal.

55WisconsinNoNoRestrictionsYes
56WyomingNoNoRestrictionsYes

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

11Dist. of ColumbiaYesYesYesNo

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.

66GuamYesYesRestrictionsYes

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

69CNMI*YesYesYesYes

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


Source:

The Federation of Tax Administrators and The Council of State Governments' survey of state websites, July 2021.

Notes:

1. Hemp-derived CBD products are legal under Federal Law in the United States; however, individual state laws vary widely. The states may enact their own laws governing hemp-derived CBD.

2. The 2018 Farm Bill re-classified hemp as an agricultural commodity and made its cultivation federally legal. This created a legal distinction between hemp and marijuana. Hemp is defined as cannabis with less than 0.3% THC, and marijuana refers to cannabis with more than 0.3% THC. This distinction under federal law legalized CBD derived from cannabis with less than 0.3% THC, as long as it has been cultivated following federal and state regulations. Under federal legal criteria, CBD oil must contain no more than 0.3 percent THC. The 2018 Farm Bill legislation does not legalize CBD throughout the United States. The Food and Drug Administration (FDA) has the authority to regulate CBD product labeling, therapeutic claims and the use of CBD as a food additive. The FDA has declared that hemp-derived CBD may not be added to food and beverages, or marketed as a dietary supplement. The agency prohibits labeling that could be interpreted as medical claims about CBD. The Farm Bill, in addition to regulating CBD also gave states the option to regulate and prohibit the cultivation and commerce of CBD. States may still regulate CBD in food, beverages, dietary supplements, and cosmetic products independently, even before the FDA finalizes its policies. There are currently no laws in the CNMI stating that CBD cannot be used as an additive in food.

Key:

* Commonwealth of Northern Mariana Islands.