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Legal marijuana generates $3.7 billion in taxes for states, $178M in Oregon

By Mike Sunnucks, Herald and News

Courtesy Unsplash

Legalized marijuana generated $3.7 billion in tax revenue in 2021 in U.S. states where recreational use of cannabis is allowed.

State governments’ tax revenue haul from legal pot is up 34% from 2020, according to the Marijuana Policy Project, which favors legalization.

In Oregon, legal pot sales generated $177.8 million in tax revenue in 2021, according to MPP. That is up from $158.3 million in tax money from marijuana sales in 2020 and $115.9 million in 2019 before the coronavirus pandemic.

Oregon legalized recreational pot in 2016. Cannabis is taxed at a 20% rate in Oregon with a 17% state levy and 3% local tax. That is compared to a 37% marijuana tax in Washington state, along with a 6.5% sales levy.

California has a 15% state marijuana excise tax along with additional levies on plants, leaves, flowers and cultivation, according to the Tax Foundation. State and local recreational marijuana levies in California can total as much as 45%.

High state tax rates and regulations continue to help sustain black market and illegal marijuana sales and illegal grows that continue to dot the landscape in southern Oregon and northern California.

Legal weed sales generated $1.3 billion in California in 2021 and $3.4 billion since 2018 when recreational cannabis was approved. In Washington state, recreational weed generated $630.9 million 2021 and $3 billion since 2014, according to MPP.

Legal cannabis has generated $11.2 billion in tax revenue for states nationally since 2014 when Colorado and Washington state were the first states to pass legalization measures. Some of the states where pot is now legal for recreational use have not yet started sales.

Eighteen states have legalized cannabis for recreational use with more considering reforming drug laws, including Maryland, Missouri, Ohio, Rhode Island and South Dakota. The U.S. House of Representatives approved a federal bill April 1 that decriminalizes marijuana nationally. The push faces a tougher challenge in the U.S. Senate and President Joe Biden has historically not backed drug law.

“Our report is further evidence that ending cannabis prohibition offers tremendous financial benefits for state governments. The legalization and regulation of cannabis for adults has generated billions of dollars in tax revenue, funded important services and programs at the state level, and created thousands of jobs across the country. Meanwhile, the states that lag behind continue to waste government resources on enforcing archaic cannabis laws that harm far too many Americans,” said Toi Hutchinson, president and CEO of the Marijuana Policy Project. (Printed under a content sharing agreement organized by Oregon Public Broadcasting.)