Cannabis Tax Revenue Soars In New Markets, Slumps In Mature States

The top seven states with adult-use cannabis programs collectively brought in $2.4 billion in tax revenue in the first nine months of 2022, according to Impact Databank. That figure was a 7.7% decline from the same period of the year prior, in which revenues totaled $2.6 billion and reached $3.4 billion for the full calendar year. Nonetheless, it’s not to be overlooked how much the cannabis industry and the taxes it contributes has grown—in 2017 those same states generated only $666 million for the year, making for a fivefold increase in only four years. That growth was driven by a mix of new markets coming online, new consumers entering the category, and increased retail access.

California remains at top of the heap, more than double its closest competitor. It generated $836.3 million in the nine-month period ending in September 2022, down 15% from 2021. Still, the Golden State is on pace to surpass $1 billion in tax revenue for the year, extrapolating from 2021’s 12-month total of $1.3 billion. Washington State, whose legal sales date back to 2014 and which carry some of the highest excise taxes of any state, was second with $361.7 million in tax revenue generated for the nine months. That made for a similar decline, slipping 12.8%. The trend held true for the other two mature markets in the top seven—Colorado and Oregon—whose revenues fell 23.1% and 15.3%, respectively, to $302.2 million and $135.5 million.

Younger markets saw strong growth. Illinois, which has leapfrogged Colorado for the No.-3 spot on the list, saw its revenues rise 14.4% to $356 million year-on-year. Massachusetts, which began sales in earnest in 2019, brought in $220.3 million through September, good for a 14.8% improvement over 2021. And Arizona’s tax revenues grew 25.6% to $198.1 million.—Danny Sullivan

Tagged : California tax revenue, cannabis, Illinois retail, Massachusetts retail, US retail

GET YOUR FIRST LOOK AT 2021 DATA AND 2022 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2022 IMPACT DATABANK REPORTS. CLICK HERE.