The Marijuana Policy Project released a new report today that helps us understand how much cash is really flying around the cannabis industry.
According to the MPP’s data, the 18 states that have legalized adult-use cannabis reported $2.7 billion in tax revenue from the industry in 2020 alone. That’s with many markets yet to open. As of this month, legal cannabis states reported a combined total of $7.9 billion in tax revenue since sales began in 2014.
The new report noted the wave of weed enthusiasm that came from the extended Covid-19 induced lockdown. MPP noted that in 2020, California collected more than $1 billion in adult-use cannabis tax revenue. This is a 62% increase compared to 2019.
Jared Moffat, state campaigns manager at the Marijuana Policy Project, weighed in on the new findings. “Legalizing cannabis for adults has proven to be a wise investment,” Moffat said. “Not only are states seeing the benefits of a regulated market and far fewer cannabis-related arrests — they’re benefitting in a direct, economic way, too.”
Moffat went on to point out where the money would be going if not for these new regulated markets.
“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities, “Moffat said. “But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care and a range of other beneficial public programs. It’s no wonder that residents in legalization states overwhelmingly see legalization as a success.”
The report said the total contribution of California’s cannabis market to state coffers is now more than $2 billion. Nearly $400 million in cannabis tax revenue was collected in 2018, and that grew to $638 million in 2019, and then again to just over $1 billion in 2020. This is all while competing with the state’s massive underground market that was said to be three times larger than the legal one in 2019.
Washington state has been the biggest winner since opening its cannabis market in 2014. That year saw only $22 million in revenue. Fast forward to 2020, and the state saw a massive $614 million in total revenue. That’s the largest annual take in any state outside of California. In total, Washington has brought in more than $2.5 billion since launch, about $500 million more than the total cannabis tax revenue in California.
Colorado’s cannabis-general tax revenue since 2014 was $1.5 billion. While a reputable third place on the overall podium, that number still falls a billion dollars short of the pace set by Washington state despite Colorado having a head start on sales.
As for some of the newer markets, many have come out the gate strong. Illinois brought in $175 million in its first year of legal cannabis sales. The state is already nearing $300 million in total revenue when this year’s sales are taken into account. From that revenue, 25% of the funds will be directed to the state’s Recover, Reinvest, and Renew Program, directly pumping funds back into communities.
Nevada’s nearly four-year-old legal market has brought the state $374 million since July 2017. Despite Las Vegas being closed for much of 2020, numbers were still up. The state’s funds from its 15% wholesale and 10% special retail tax went from $107 million in tax revenue in 2019 to $123 million in 2020. But 2021 is already looking like it’ll eclipse last year, without a doubt. The first two months of the year saw $25 million in revenue and the Vegas strip wasn’t even close to full activity.