Marijuana tax rates: a state-by-state guide

Cannabis taxes can be a pain in the pocketbook, but they keep marijuana legal and well regulated. Tax rates vary dramatically from state to state. Many states tax medical marijuana at a minimal level or not at all. Adult-use states tend to tax non-medical cannabis at so-called sin tax rates, 20% to 35% and higher, much like alcohol.

For some medical patients in adult-use states, it can be easier to buy non-medical cannabis products and skip the hassle of getting or renewing a medical card. For others, a $50 or $100 med card renewal may save them thousands in adult-use cannabis excise taxes.

An excise tax is a tax on a specific product—in this case, cannabis. Many states levy a marijuana excise tax in addition to the regular state sales tax. Some local towns and counties may also add an additional 1% to 3% tax on top of that. It does add up.

Wondering where that money goes? Leafly has looked into California, Nevada, and Illinois, and also probed the question of cannabis money funding the police.

We will continue to update this state-by-state guide as rates change.

Marijuana tax rates in Alaska

Cannabis is taxed primarily at the wholesale level in Alaska, although local town or borough taxes may be imposed.

Adult-use retail sales: Purchases are not subject to any statewide cannabis tax, although some municipalities do charge a cannabis excise tax. Anchorage, Mat-Su Borough, Fairbanks, and Ketchikan all charge a 5% excise tax. Juneau charges 3%.

Medical marijuana: There is no cannabis excise tax on medical marijuana.

There is no statewide retail sales tax in Alaska. Local municipalities may impose a local sales tax.

Wholesale: As of Jan. 1, 2019, mature bud and flower are taxed at $50 per ounce; immature or abnormal bud is taxed at $25 per ounce; trim is taxed at $15 per ounce; and clones are taxed at a flat rate of $1 per clone.

More information: Alaska Department of Revenue.  

Marijuana tax rates in Arizona

Adult-use retail sales: Purchases are subject to a 16% cannabis excise tax in addition to a 5.6% statewide retail sales tax, bringing the total to 21.6%.

Medical marijuana sales: Purchases are subject to a 6.6% state excise tax plus an additional 2-3% optional tax dictated by local municipalities.

For more information, check out applicable pages on the Arizona Department of Health Services website here and here.

Marijuana tax rates in Arkansas

Medical marijuana sales: Purchases are subject to the 6.5% statewide sales tax and an additional privilege tax of 4%, as well as all applicable local taxes.

Additionally, dispensaries pay a 4% privilege tax when they purchase products from cultivators. 

For more information, check out this report on the Arkansas medical marijuana industry. 

Marijuana tax rates in California

Adult use retail sales: California has a statewide 15% cannabis excise tax, as well as a state retail sales tax of 7.25%, and an automatic local sales tax of up to 1%. Local municipalities may, at their discretion, tack on an additional businesses tax of up to 15%. So a customer may pay anywhere from 23% to 38% in tax.

Medical marijuana: Medical purchases are not subject to the retail sales tax, but the 15% cannabis excise tax still applies. Municipalities are also able to slap a local tax on medical marijuana purchases.

For more information on California’s adult-use taxes, check out Leafly’s handy explainer.

Marijuana tax rates in Colorado

Adult-use retail: Sales are subject to a 15% cannabis excise tax and any additional local taxes.

Medical marijuana: Sales are subject to a 2.9% state excise tax and any additional local taxes.

Wholesalers are additionally subject to a 15% excise tax, levied on the first transfer of marijuana to a processor or retailer.

For more information, check out pertinent documents from the Colorado Department of Revenue here and here. 

Marijuana tax rates in Connecticut

Medical marijuana: Purchases are only subject to the statewide retail sales tax of 6.35%.

For more information, check out this bulletin on marijuana tax policy in Connecticut.

Marijuana tax rates in Delaware

Medical marijuana: There is no tax on medical marijuana. Delaware does not have a statewide retail sales tax.

For more information, visit the Delaware Health and Human Services Department website 

Marijuana tax rates in Florida

Medical marijuana: There is no excise tax on medical marijuana sales. Purchases are subject to the statewide retail sales tax of 6%.

Marijuana tax rates in Hawaii

Medical marijuana: There is no excise tax on medical marijuana in Hawaii. Purchases are subject to the statewide retail sales tax of 4%, except on Oahu where the tax rate is 4.5%.

Learn more on the state’s Medical Marijuana Program website.

Marijuana tax rates in Illinois

Adult-use retail: Cannabis tax rates in Illinois are complex and mostly based on THC content. Generally, the higher the THC concentration, the higher the tax rate.

Infused food and beverages come with a 20% marijuana excise tax.

All other cannabis products containing 35% THC or less are subject to a 10% excise tax.

All other cannabis products containing more than 35% THC are subject to a 25% excise tax.

On top of that there’s a 6.25% statewide retail sales tax, and potentially other local municipal taxes (which may run up to 3%).

So, rough total out the door, expect your cannabis leaf to be taxed at 16%, edibles at 26%, and concentrates at 31%.

Medical marijuana: Purchases are subject only to the 1% statewide sales tax on qualifying drugs.

For more information, check out the Illinois Revenue Cannabis FAQ page.

Marijuana tax rates in Iowa

Medical marijuana: Purchases are subject to the state retail sales tax of 6%, as well as additional local taxes.

For more information, visit Iowa’s Office of Medical Cannabidiol website.

Marijuana tax rates in Louisiana

Medical marijuana: Purchases by patients are not subject to taxes.

Read the applicable state legislation here. 

Marijuana tax rates in Maine

Adult-use retail: Purchases are subject to a 10% marijuana excise tax, plus the statewide 5.5% sales tax. No additional local municipal taxes are allowed.

Medical marijuana: There are no marijuana excise taxes imposed on medical sales, but they are subject to the normal statewide sales tax of 5.5%—except for edibles, which are taxed at 8%. No additional local municipal taxes are allowed.

Wholesale: The excise tax on cultivators is $335 per pound of flowers, $94 per pound for trim, $1.50 per pound for seedlings and 35 cents per pound for seeds. 

For more information, check out this handy one-sheet from the Maine Municipal Association and this story from the Bangor Daily News.

Marijuana tax rates in Maryland

Medical marijuana: Purchases are not subject to the statewide sales tax. There are no excise taxes on medical cannabis.

For further information, check out this brief from the Maryland Government Finance Officers Association.

Marijuana tax rates in Massachusetts

Adult-use retail: Purchases are subject to a 10.75% marijuana excise tax, plus the state’s normal 6.25% sales tax, and an optional local excise tax, up to 3%.

The upshot: Expect to pay roughly 17% to 20% tax as an out-the-door total.

Medical marijuana: Purchasers pay no taxes on medical marijuana.

For more information, see the Massachusetts Department of Revenue website.

Marijuana tax rates in Michigan

Adult use retail: Purchases are subject to a 10% marijuana excise tax, and the statewide 6% sales tax.

Medical marijuana: Purchases are subject only to the statewide 6% sales tax.

For more information, check out this analysis of Michigan cannabis taxes and the state Marijuana Regulatory Agency website.

Marijuana tax rates in Minnesota

Medical marijuana: Purchases are not taxed.

For more information, visit the Minnesota Department of Health website.

Marijuana tax rates in Mississippi

Medical marijuana: Mississippi voted to legalize medical marijuana in November, and the state’s program will hopefully come online this summer, even though state lawmakers are actively working to undermine it by retroactively passing an alternate bill. 

If the bill passed by voters, Initiative 65, goes into effect, there technically won’t be a tax for patients, but purchases will be subject to a “user fee”—not to exceed state sales tax (7%) – that would be used exclusively to fund the program itself.

For more information, see the full text of Measure 65, the state’s medical marijuana legislation.

Marijuana tax rates in Missouri

Medical marijuana: Purchases are subject to a 4% tax. No additional taxes are imposed.  

Learn more on the Missouri Department of Revenue website.

Marijuana tax rates in Montana

Adult use retail: Montana’s adult use program, which is projected to launch in 2022, will include a 20% marijuana excise tax. There is no general statewide sales tax in Montana.

Medical marijuana: Purchases are subject to a 4% excise tax.

For more information, check out the Montana Department of Revenue website.

Marijuana tax rates in Nevada

Adult use retail: Purchases are subject to a 10% cannabis excise tax, pluse the 4.6% statewide sales tax. Out the door, expect a total of roughly 15% added to your purchase for taxes.

Medical marijuana: Purchases are subject only to the 4.6% statewide sales tax.

Wholesale: There is a 15% marijuana excise tax imposed on wholesale sales and transfers.

For more information, check out the Nevada Department of Taxation website.

Marijuana tax rates in New Hampshire

Medical marijuana: Purchases are not subject to any taxes. New Hampshire does not have a statewide retail sales tax.

For more information, visit the New Hampshire Therapeutic Cannabis Program website.

Marijuana tax rates in New Jersey

Medical marijuana: New Jersey is in the process of slowly lowering taxes on medical cannabis purchases:

• 4% on sales made until June 30, 2021
• 2% on sales made between July 1, 2021, and June 30, 2022
• 0% on sales made on and after July 1, 2022

Adult use retail: New Jersey’s recreational program is expected to come online later this year. Sales will be subject to the 6.625% statewide sales tax, but no specific marijuana excise tax. Local municipalities will be permitted to tack on an additional 2% sales tax. So expect to see a total out-the-door tax of roughly 9%.

For more information, see the New Jersey Treasury website. 

Marijuana tax rates in New Mexico

Medical marijuana: Dispensaries are required to pay a gross receipts tax, which varies across the state from 5.125% to 8.8125%. Some dispensaries factor this tax into the price of a purchase, and others tack it on at point of sale.

Adult-use retail: The state applies two separate taxes to recreational cannabis sales: A 12% excise tax that will increase by 1% annually starting in 2025, and a separate gross receipt tax that ranges from 5-9% depending on local law. 

For more information, check out the New Mexico Medical Cannabis program website.

Marijuana tax rates in New York

Medical marijuana: Purchases are subject to a 7% medical marijuana excise tax, but are not subject to any statewide retail sales tax.

For more information, read the applicable New York Department of Taxation and Finance memo.

Marijuana tax rates in North Dakota

Medical marijuana: Purchases are subject to North Dakota’s 5% statewide sales tax.

More information can be found on the program’s website.

Marijuana tax rates in Ohio

Medical marijuana: Purchases are subject to statewide sales tax, which ranges between 6.5% and 7.25% depending on the county.

For more information, check out Ohio’s medical marijuana program website and this account of Ohio’s medical marijuana program.

Marijuana tax rates in Oklahoma

Medical marijuana: Purchases are subject to a 7% medical marijuana excise tax, as well as the 4.5% statewide sales tax and any additional local municipal taxes. Expect to pay roughly 12% or more in taxes out the door.

For more information, see this Oklahoma tax guidance document.

Marijuana tax rates in Oregon

Adult-use: Purchases are subject to a 17% cannabis excise tax, as well as an additional 3% local municipal tax. There is no statewide sales tax in Oregon.

Medical marijuana: Purchases are not taxed.

Learn more about adult-use cannabis via the Oregon Department of Revenue, and more about the medical program via the Oregon Health Authority.

Marijuana tax rates in Pennsylvania

Medical marijuana: There is no tax on purchases by patients.

Wholesale: There is a 5% wholesale excise tax paid by growers/processors when they sell their wares to dispensaries.

For more information, check out the Pennsylvania Medical Marijuana program.

Marijuana tax rates in Rhode Island

Medical marijuana: Purchases are subject only to the 7% statewide sales tax.

Additionally, Rhode Island’s “compassion centers” are required to pay the state a surcharge of 4% on a monthly basis. These centers may choose to pass along this surcharge, which is effectively a tax, to their patients.

For more information, here are the state’s taxation rules.

Marijuana tax rates in South Dakota

Adult use retail: The validity of recreational legalization bill Amendment A, which South Dakota voters passed in November, is currently being debated in the South Dakota courts. If the bill does go into effect, adult-use sales will be subject to a 15% marijuana excise tax, in addition to the statewide 4.5% sales tax.

Medical marijuana: South Dakota voted to legalize medical marijuana in Nov. 2020. When the initiative is enacted, medical marijuana sales will not be taxed.

For more information, check out Leafly’s coverage of South Dakota’s dual legalization bills. 

Marijuana tax rates in Utah

Medical marijuana: There are no taxes on medical marijuana purchases.

For more information, see the Utah Medical Cannabis Act.

Marijuana tax rates in Vermont

Adult use retail: Recreational marijuana sales will be subject to a 14% cannabis excise tax, and Vermont’s 6% statewide sales tax. Estimate roughly 20% in taxes out the door.

Medical marijuana: Purchases are not taxed.

For more information, see this Vermont Department of Taxes document.

Marijuana tax rates in Virginia

Adult use retail: Virginia’s adult-use stores, which are scheduled to open in 2024, will collect a 21% state cannabis excise tax in addition to the statewide 5.3% sales tax. An extra 3% tax may be added by the local municipality.

Marijuana tax rates in Washington

Adult use retail: Purchases are subject to a 37% marijuana excise tax.

Medical marijuana: Purchases are not taxed.

For more information, check out the Washington Liquor and Cannabis Board FAQ page.

Marijuana tax rates in Washington, D.C.

Adult use retail: While adult-use cannabis possession is legal in the District, sales are not.

Medical marijuana:Purchases are subject to a sales tax of 5.75%.

For more information, check out this paper from the Third Way think tank and Leafly’s coverage of the Washington, DC cannabis market.

Marijuana tax rates in West Virginia

Medical marijuana: Dispensaries required to pay a 10% tax on gross receipts.

For more information, check out the West Virginia Medical Cannabis Act.