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States Have Earned Over $15 Billion In Marijuana Tax Revenue In The Last 5 Years, ‘And The Numbers Keep Growing,’ New Federal Report Says
States generated more than $3.5 billion in tax revenue from legal marijuana sales over the last year, according to a newly updated federal report.
The analysis from the U.S. Census Bureau also shows that since the agency began tracking the issue in the third quarter of 2021, states have brought in a total of more than $15.8 billion in cannabis revenue.
“While cannabis remains illegal federally, 30 states and the District of Columbia (D.C.) collect excise taxes on cannabis sales,” the agency said. “Their contributions to state tax receipts have reached new heights: an estimated $3.55 billion in combined tax revenue between July 2025 and June 2026.”
“And the numbers keep growing,” it said.
The Census Bureau on Thursday issued the latest periodic update to its Cannabis Excise Sales Tax Collections data to include totals from the second quarter of 2026, during which states and D.C. reported taking in a total of $987.5 million in marijuana tax revenue.
Individual states reporting the highest dollar amounts from marijuana sales during Q2 of this year were California ($161 million), Washington State ($153.1 million), Michigan ($110.6 million), New York ($76.8 million), Illinois ($71.8 million) and Colorado ($55 million).
The latest updated federally compiled figures also provide a look at which states have brought in the most cannabis revenue over time since the Census Bureau started tracking the issue five years ago.
The more than $3.3 billion that California has generated from marijuana sales since late 2021 represents nearly than a fifth of all cannabis dollars brought into state coffers across the country during that period. Washington State comes in second place, with $2.3 billion, followed by Illinois ($1.4 billion), Colorado $1.4 billion), Michigan ($1.3 billion), Massachusetts ($879.1 million), Arizona ($831.2 million) and Oregon ($811.6 million).
The federal data doesn’t include tax earnings from quarters prior to Q3 2021.
While nationwide cannabis tax hauls have generally increased year over year, the bureau noted a dip in overall marijuana revenue in Fiscal Year 2023, which it said “can be largely attributed to California,” which eliminated a cultivation tax that year “to ease the tax burden, lower market prices and curb the black market.”
“The nationwide decline in FY 2023 reflected California’s policy shift, but totals climbed again in subsequent years as more states began collecting cannabis taxes,” it said.
Delaware and Minnesota, it said, “have rapidly growing recreational markets” that recently launched.
The agency also looked at per capita cannabis tax revenues in each state, finding that Washington and Montana each collect more than $50 per resident in marijuana excise taxes each year—the highest in the nation, which is “driven by particularly high retail excise rates of 37% and 20%, respectively,” it said.
Via U.S. Census Bureau.
A separate recent report from Yale University researchers found that federally legalizing marijuana would generate $57.9 billion in new tax revenue over a decade—and that additional states also moving to legalize cannabis would nearly double that haul.
Another report from the advocacy group the Marijuana Policy Project found that states have generated more than $28.4 billion in tax revenue from recreational marijuana sales since the first markets launched over a decade ago.
While those figures reach back further than the Census Bureau’s do, they don’t account for additional revenue that states have collected from medical marijuana sales, or from cannabis business application and licensing fees.
Notably, the Census tracker’s numbers lag behind the real-time market. The agency says figures shown are “based on a calendar quarter and generally represent taxes collected on sales made during the prior quarter (i.e. data released in September 2023 will cover sales during the quarter ended June 30, 2023).”
While not every state with legal marijuana has consistently provided data for the national tracker, the project nevertheless represents the federal government’s growing effort to account for the size and scope of the cannabis industry—which despite the growing number of state legalization laws remains generally federally illegal, although the rescheduling reform being implemented by the Trump administration is partially changing that.
In 2023, the Census Bureau separately updated its survey of private businesses to better capture marijuana-related economic activity.
Together, the tracking and reporting efforts indicate an increasing willingness by the federal government to acknowledge the billions of dollars in annual economic activity generated by an industry that it continues to largely prohibit.
The new state tax revenue data used to build the report “result from a complete canvass of all state government agencies,” the bureau said in a methodology note. While it refers to the revenue as “quarterly cannabis excise sales tax collections,” it also says that “taxes” are defined rather broadly.
“For this dataset, the concept of ‘taxes’ is comprised of all compulsory contributions exacted by a government for public purposes,” it said. “Tax revenue is further defined to include related penalty and interest receipts of a government but to exclude protested amounts.”
The bureau has two separate tax codes for marijuana revenue that it asks states to report, one for taxes on cannabis transactions and another for business license fees.
The agency has said its own figures might not align perfectly with state-reported data “because the Census Bureau may be using a different definition of which organizations are covered by the term, ‘state government.’” The bureau’s definition, it explains, “refers not only to the executive, legislative, and judicial branches of a given state, but it also includes agencies, institutions, commissions, and public authorities.”
Meanwhile, a separate recent economic analysis by Vangst and Whitney Economics found that, for the first time since state recreational marijuana markets launched in 2014, the industry saw a year-over-year decline in national revenue from cannabis sales in 2025.
