You picked out $50 worth of cannabis at a California dispensary and handed over your card, and the total came back noticeably higher than the shelf price. The receipt showed several separate tax lines. You are not imagining it. Cannabis is one of the most heavily taxed consumer products in the United States, and the tax structures are complicated.
Understanding why your dispensary receipt looks the way it does, and how your state compares to others, gives you a clearer picture of where your money actually goes.
Updated November 2, 2026: We rechecked every state entry against official state sources, corrected several rates that had changed (including California, Colorado, Connecticut, Maryland, Michigan, Minnesota, New York, and Washington), and added the latest U.S. Census Bureau data on cannabis tax revenue. Each state entry now links to its official source.
Quick Answer: What Are Cannabis Tax Rates by State?
States tax cannabis in very different ways, so a single “rate” rarely tells the whole story. Among the states in this guide, cannabis-specific percentage taxes on adult-use retail sales run from Missouri’s 6 percent state tax to Washington’s 37 percent excise tax. Several states also tax cannabis earlier in the supply chain (Alaska, Colorado, Michigan, and Nevada, for example), and most also apply ordinary state and local sales taxes. Because these taxes are charged at different points and on different prices, their rates cannot simply be added together to get one “total” figure. Always confirm the current rate with your state’s revenue department.
How Cannabis Taxes Work: The Three Layers
Excise Tax
This is the cannabis-specific tax. Depending on the state, it is charged at the register as a percentage of the retail price, at the wholesale transfer between a grower or processor and a retailer, or based on weight or THC content. Washington applies a 37 percent excise tax at retail. California applies 15 percent of a retailer’s gross receipts. Missouri applies a 6 percent state tax to adult-use retail sales.
State Sales Tax
In most states, adult-use cannabis is also subject to the standard state sales tax. California’s statewide base sales tax rate is 7.25 percent, and the cannabis excise tax is included in the amount subject to sales tax. (Source: CDTFA.) Washington collects retail sales tax in addition to its 37 percent excise tax. (Source: Washington Department of Revenue.) Some states use a cannabis-specific tax instead: Colorado exempts retail marijuana from its 2.9 percent general state sales tax and applies a separate 15 percent retail marijuana sales tax, and Maryland taxes adult-use cannabis at its own 12 percent sales and use tax rate. (Sources: Colorado Department of Revenue; Maryland details in the state entry below.)
Local Tax
Many states let cities or counties add their own cannabis tax, usually with a cap. Illinois caps the municipal cannabis tax at 3 percent and the county tax at 3.75 percent in unincorporated areas (3 percent inside a municipality). Connecticut adds a 3 percent municipal cannabis tax, and Massachusetts, Missouri, Montana, and Oregon allow local cannabis taxes of up to 3 percent. California cities and counties can set their own local cannabis business taxes. These local additions are why the same product can cost noticeably different amounts in different cities within the same state. State-by-state sources are linked below.
State by State Cannabis Tax Comparison 2026
Alaska: Weight-Based Tax at the Cultivation Stage
Alaska does not have a retail cannabis excise tax. Instead, it taxes marijuana by weight when it is sold or transferred from a cultivation facility: $50 per ounce for mature bud, $25 per ounce for immature or abnormal bud, and $15 per ounce for the rest of the plant. Because the tax is charged per ounce at the grower level, it cannot be converted into a single retail percentage. Alaska has no statewide sales tax, though some cities and boroughs levy a local sales tax. (Source: Alaska Office of the State Assessor; Alaska Department of Revenue regulation 15 AAC 61.100; U.S. Census Bureau.)
Arizona: 16 Percent Excise Plus Transaction Privilege Tax
Arizona applies a 16 percent marijuana excise tax to adult-use retail sales. Those sales are also subject to Arizona’s transaction privilege tax, the state’s version of a sales tax, which can include state, county, and city portions. Medical marijuana is subject to transaction privilege tax but not to the 16 percent excise tax. (Source: Arizona Department of Revenue.)
California: 15 Percent Excise Plus Sales and Local Taxes
California’s cannabis excise tax is 15 percent of a retailer’s gross receipts. The rate briefly rose to 19 percent from July 1 through September 30, 2025, then returned to 15 percent on October 1, 2025, after Assembly Bill 564, which also delayed the next scheduled rate adjustment until the 2028-29 fiscal year. The 7.25 percent statewide base sales tax also applies, and cities and counties can add their own cannabis business taxes, so the amount at the register varies by location. (Source: California Department of Tax and Fee Administration.)
Colorado: 15 Percent Wholesale Excise Plus 15 Percent Retail Sales Tax
Colorado taxes cannabis at two stages. A 15 percent excise tax applies to the first sale or transfer of unprocessed retail marijuana from a cultivation facility, calculated on the state’s average market rate or the contract price. At the register, a separate 15 percent retail marijuana sales tax applies. Retail marijuana is exempt from the 2.9 percent general state sales tax, but some local sales taxes may apply. Because the excise tax is paid at wholesale on a different price, it should not be added to the retail rate as if both appeared on your receipt. (Source: Colorado Department of Revenue, Excise 23; Sales 93.)
Connecticut: Flat 10.75 Percent Cannabis Tax Since October 1, 2026
Connecticut replaced its THC-based cannabis tax on October 1, 2026. Adult-use sales are now subject to a statewide cannabis tax of 10.75 percent of the retailer’s gross receipts, plus the 6.35 percent state sales tax and a 3 percent municipal cannabis tax. Before October 1, the statewide tax was charged per milligram of THC (0.625 cents for plant material, 2.75 cents for edibles, and 0.9 cents for other products). Medical (palliative) cannabis sales are not subject to the statewide cannabis tax. (Source: Connecticut Department of Revenue Services; Office of Legislative Research bill analysis.)
Illinois: Tiered by THC Content
Illinois applies a cannabis purchaser excise tax based on product type and potency: 10 percent for cannabis at or below 35 percent adjusted THC, 25 percent for cannabis above 35 percent, and 20 percent for cannabis-infused products. Adult-use cannabis is also subject to the 6.25 percent state retailers’ occupation tax and local sales taxes. Municipalities may add a cannabis tax of up to 3 percent, and counties up to 3.75 percent in unincorporated areas or 3 percent inside a municipality. (Source: Illinois Department of Revenue.)
Maryland: 12 Percent Sales and Use Tax
Maryland taxes adult-use cannabis through a 12 percent sales and use tax. The rate rose from 9 percent on July 1, 2025, with the additional 3 percent directed to the state’s General Fund. Sales of medical cannabis are exempt from the sales and use tax. (Source: Office of the Comptroller of Maryland; Maryland Tax Alert.)
Massachusetts: 10.75 Percent Excise Plus Sales Tax
Massachusetts applies a 10.75 percent state excise tax to adult-use retail sales, plus the 6.25 percent state sales tax. Cities and towns that host marijuana establishments may add a local tax of up to 3 percent. Medical marijuana sales are exempt from these taxes. (Source: Massachusetts Cannabis Control Commission.)
Michigan: Retail Taxes Plus a 24 Percent Wholesale Tax
Michigan’s adult-use retail sale is subject to a 10 percent marijuana excise tax and the 6 percent state sales tax. Since January 1, 2026, Michigan has also imposed a separate 24 percent wholesale tax on specified adult-use sales or transfers to retailers, and on product that seed-to-sale microbusinesses package for their own retail sale. The wholesale tax is generally the wholesaler’s legal liability and applies at a different stage of the supply chain; it is not a 24-percentage-point retail tax added directly to a customer’s receipt. The wholesale tax may affect business costs and prices, but the extent of any pass-through depends on transactions and market conditions.
For the scope of taxable transactions, who remits the tax, and current filing guidance, consult the Michigan Department of Treasury’s Wholesale Marijuana Tax page and Revenue Administrative Bulletin 2026-3. This summary is general information, not tax advice.
Minnesota: 15 Percent Gross Receipts Tax Plus Sales Tax
Minnesota’s cannabis gross receipts tax rose from 10 percent to 15 percent on July 1, 2025. Taxable cannabis products are also subject to the 6.875 percent state sales tax and any applicable local sales taxes. (Source: Minnesota Department of Revenue; Minn. Stat. 295.81.)
Missouri: 6 Percent State Tax Plus Local Option
Missouri’s constitution sets a 6 percent state tax on adult-use marijuana retail sales, and the regular 4.225 percent state sales tax and local sales taxes also apply. Local governments may impose an additional sales tax of up to 3 percent on adult-use marijuana. Medical marijuana is taxed at 4 percent. (Source: Missouri Department of Revenue; state sales tax rate.)
Montana: 20 Percent Adult-Use, 4 Percent Medical
Montana taxes adult-use marijuana at 20 percent and medical marijuana at 4 percent, calculated on the net retail price after any discounts. Counties may add a local-option tax of up to 3 percent on adult-use sales, medical sales, or both. (Source: Montana Department of Revenue.)
Nevada: Layered Wholesale and Retail Excise
Nevada imposes a 15 percent excise tax on the first wholesale sale of cannabis by a cultivation facility, based on a fair market value at wholesale set by the state, plus a 10 percent retail excise tax on adult-use sales. Patient cardholders are exempt from the 10 percent retail tax. Because the wholesale tax is calculated on a different price base, it cannot be added to the retail rate to produce a single total. (Source: Nevada Department of Taxation.)
New Jersey: Sales Tax Plus a Per-Ounce Fee on Growers
Retail sales of adult-use cannabis in New Jersey are subject to the 6.625 percent state sales and use tax. Instead of a percentage excise tax at the register, cultivators pay a Social Equity Excise Fee on each usable ounce they sell to other cannabis businesses; it is $2.50 per ounce in 2026, and the fee is not imposed on retail consumers. Municipalities may add a local cannabis transfer tax of up to 2 percent. Medical cannabis is exempt from sales tax. (Source: New Jersey Division of Taxation, SEEF; Publication ANJ-30; NJ sales tax rate.)
New York: 13 Percent Retail Tax Plus a Distributor Tax
New York retailers pay retail taxes totaling 13 percent on adult-use cannabis sales: a 9 percent state tax and a 4 percent local tax. Separately, distributors pay a 9 percent tax on their sales to retailers; that percentage-based distributor tax replaced New York’s earlier THC-based potency tax on June 1, 2024. (Source: New York State Department of Taxation and Finance; N.Y. Tax Law 493.)
Oregon: 17 Percent State Tax Plus Local Option
Oregon applies a 17 percent state tax to retail marijuana sales. With voter approval, cities and counties may add a local marijuana tax of up to 3 percent. (Source: Oregon Department of Revenue.)
Washington: 37 Percent Retail Excise Plus Sales Tax
Washington retailers collect a 37 percent cannabis excise tax on each retail sale of usable cannabis, concentrates, and infused products. Retail sales tax also applies, and the excise tax is not included in the selling price for sales tax purposes. Among the states in this guide, the 37 percent excise is the highest single cannabis tax rate. (Source: Washington Department of Revenue.)
Cannabis Tax Revenue by State: What the Latest Census Data Shows
Latest Census estimate: $3.55 billion in cannabis excise tax revenue in FY 2026 across 30 states and D.C. This is a government tax-receipts estimate, not a measure of total cannabis sales or retail prices. Source: U.S. Census Bureau, released September 10, 2026.
The latest U.S. Census Bureau estimate puts combined cannabis excise tax revenue at $3.55 billion for fiscal year 2026 across 30 states and the District of Columbia. The Census Bureau says the total rose 15.7 percent from $3.06 billion in FY 2022, the first year in its comparison series.
That figure measures tax revenue reported or estimated by governments. It is not the value of all cannabis sales, the size of the legal market, dispensary revenue, or the amount consumers paid at checkout. Tax rates, tax bases, market start dates, and state fiscal calendars differ, so a larger revenue total does not by itself mean a state has a larger market or a higher tax rate.
California illustrates why year-to-year comparisons need context. Census reports that California’s cannabis tax revenue fell from $878.56 million in FY 2022 to $528.23 million in FY 2023 after the state eliminated its cultivation tax on July 1, 2022. The national total later increased as additional states began collecting cannabis taxes.
Per-resident figures also tell a different story from total dollars. Census reports that Washington and Montana each collected more than $50 per resident in cannabis excise taxes in the latest comparison, while Alaska exceeded $30 per resident using a cultivation tax collected at transfer rather than a retail excise tax. These differences reflect the design of each state’s system as well as its market and population; they are not direct measures of consumer prices.
The Census Bureau’s Quarterly Summary of State and Local Government Tax Revenue (QTAX) provides state-level tax estimates. Census notes that it classifies state records into its own uniform tax categories, that estimates can be revised, and that missing data may be imputed. Readers comparing a Census figure with a state agency’s published total should check each source’s reporting period, tax definition, and revision date.
For current tax rates at the register, see the state-by-state comparison above and verify the rate with the relevant state revenue department. Revenue totals and tax rates answer different questions.
Sources: U.S. Census Bureau, cannabis excise tax revenue estimates (September 10, 2026); Census QTAX data tables; Census QTAX methodology.
Where Cannabis Tax Revenue Goes
Each state directs cannabis tax revenue differently, and the rules are set in state law. A few examples:
- California: After administrative and research costs, Proposition 64 splits the remaining cannabis tax revenue 60 percent to youth substance use education, prevention, and treatment, 20 percent to environmental cleanup of illegal grows, and 20 percent to public safety programs. (Source: California Legislative Analyst’s Office.)
- Colorado: The first $40 million a year from the 15 percent excise tax goes to the Building Excellent Schools Today (BEST) school construction program. A separate Marijuana Tax Cash Fund supports health care, health education, substance abuse prevention and treatment, and law enforcement. (Source: Colorado Legislative Council Staff.)
- Illinois: After administrative and expungement costs, 25 percent of the remaining cannabis revenue goes to the Restore, Reinvest, and Renew (R3) program for communities affected by past enforcement, with other shares going to the state’s general fund, human services, local governments, and drug treatment. (Source: Illinois Cannabis Regulation Oversight Office.)
- Maryland: The added 3 percent from the 2025 rate increase goes to the General Fund before other distributions. The Comptroller reports that 35 percent of quarterly revenue goes to the Community Reinvestment and Repair Fund, and 5 percent each goes to counties and the Cannabis Public Health Fund. (Source: Office of the Comptroller of Maryland.)
- Missouri: The 6 percent adult-use tax first covers administrative and expungement costs; the rest is split in thirds among veterans services, grants for addiction treatment and recovery support, and the state public defender system. (Source: Missouri Constitution, Article XIV, Section 2.)
Taxes and the Unlicensed Market
The unlicensed cannabis market has not disappeared in legal states, and price is one of the factors policymakers weigh. According to the U.S. Census Bureau, states try to raise revenue without pushing prices so high that consumers turn to illegal markets, which is one reason tax structures keep changing. California, for example, eliminated its cultivation tax in 2022 to ease the tax burden, lower prices, and curb the illicit market, and Connecticut switched to a flat percentage tax in 2026. How much taxes alone drive unlicensed sales is debated and varies by state, so treat any single explanation with caution. (Source: U.S. Census Bureau.)
Frequently Asked Questions
Which state has the highest cannabis tax?
Among the states in this guide, Washington’s 37 percent retail excise tax is the highest single cannabis tax rate, and retail sales tax applies on top of it. Comparing total tax burdens across states is harder, because some states also tax cannabis at the wholesale or cultivation stage on a different price base.
Which state has the lowest cannabis tax?
It depends on what you compare. Among the percentage-based taxes on adult-use retail sales covered here, Missouri’s 6 percent state tax is the lowest, though general sales taxes and any local marijuana tax also apply. New Jersey and Alaska do not use a retail percentage cannabis tax at all; they charge per-ounce fees or taxes at the grower level instead.
Why is cannabis taxed so much?
Cannabis taxes help fund state budgets and programs such as public health, education, and community reinvestment, depending on the state. According to the U.S. Census Bureau, states try to raise revenue without pushing legal prices so high that consumers turn to illegal markets, which is one reason rates and tax structures change often.
Do medical cannabis patients pay lower taxes?
In most states with both markets, yes. Montana taxes medical marijuana at 4 percent versus 20 percent for adult use. Colorado exempts medical marijuana from its 15 percent retail marijuana sales tax, although the general 2.9 percent state sales tax applies. Massachusetts, Maryland, New Jersey, Nevada, and Connecticut also exempt medical sales from their main adult-use cannabis taxes.
This article is for general information only and is not tax or legal advice. Cannabis tax rates change often; confirm current rates with your state’s revenue department.
Author: Paul Jernigan covers cannabis law, policy, and economics for Ganjly.
Related: Read Ganjly’s complete possession limits chart and our individual state guides for detailed tax breakdowns.
