While 19 states have enacted a tax on recreational marijuana, there is no standard cannabis tax in the US the way there is an alcohol tax, cigarette tax, and gas tax.
Instead, governments use three different types of cannabis taxes: a percentage-of-price tax, a weight-based tax, and a potency-based tax. Different states use different taxes and some states levy multiple taxes. Additionally, some state and local governments levy their general sales tax on the purchase of marijuana.
This report is a guide for policymakers, journalists, and engaged community members hoping to better understand cannabis tax debates. It details each state’s cannabis tax system, provides data on cannabis tax revenue, explains the pros and cons of different cannabis taxes, and discusses the various goals of those taxes.
This publication was updated on January 18, 2023. In the original version, on page 18, we included Washington state on the list of states that repealed their weight-based taxes on cannabis purchases. The tax repealed in Washington was based on price, not weight, and the language has been corrected