How High Are Recreational Marijuana Taxes in Your State?

How High Are Recreational Marijuana Taxes in Your State?

Published on 4/22/18

9 individual states and the District of Columbia have all legalized the possession of recreational marijuana and most have already established retail markets. A major contribution to how successful the market can become is the system that taxes the cannabis businesses and customers. Some recreational cannabis markets like Alaska's only tax the growers when selling the product to the dispensaries instead of extending the sales tax to the customer. Other markets like Colorado's and Washington's feature a heavy tax on the customer that many find undesirable and push some to use the cheaper black market instead. As more states vote on and adopt recreational cannabis policies it's important to create comprehensive programs that balance the necessary operating taxes with a reasonable price for consumers. 

To date, nine states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont, and Washington) and the District of Columbia have legalized recreational marijuana, but only eight of these jurisdictions have legal markets.

Of the states with legal markets, Alaska is the only state that does not impose some form of sales tax on end-users. In each of the other states, taxes levied on the sale of marijuana far exceed the general sales tax rate levied by that state:

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