How Much Each State (and the Federal Government) Would Make if They Legalized Marijuana

How Much Each State And The Federal Government Would Make If They Legalized Marijuana

In 2019, Colorado dispensaries generated $1.75 billion in legal marijuana sales. Out of that incredible amount, Colorado state was able to collect over $250 million in tax revenue to allocate toward building and renovating schools, supporting K-12 education, grants for school health professionals, early literacy programs, and more. Unfortunately, that type of investment into public services isn’t the norm across the entirety of the country – and politicians will argue it’s because the funds aren’t available!

Currently, recreational marijuana is legal in only 11 states, and recreational sales are ongoing in only 9 of those states. Despite that meager figure, the market was valued at over $13 billion in 2019. And that’s only the legal marijuana market! If you factor in the projected dollars that are generated illegally, the total market demand sits somewhere around a whopping $60 billion dollars. With only 27% of the U.S. population residing in completely legal states and public perception of cannabis growing more positive each day, there’s no telling how much higher that market demand will climb. If those factors aren’t glowing incentives to legalize, I’m not sure what is.

But then again, not every state is Colorado. Based on the reported number of weed users from each state, how much money is each state projected to make if they were to completely legalize marijuana?

Alabama

Marijuana Laws in Alabama

Both medical and recreational marijuana have remained illegal in Alabama since the plant was initially banned in 1931. Though the use and sale of non-psychoactive CBD has been protected by law since 2014, attempts to legalize medical marijuana and reduce penalties for recreational use have fallen on deaf ears.

How Much Money Would Alabama Make if Marijuana Were Legal?

Based on a survey conducted by the Substance Abuse and Mental Health Services Administration (SAMHSA), there are approximately 316,000 marijuana users in the state of Alabama. If Alabama were to legalize marijuana and adopt the same tax structure as Colorado, they could collect approximately $102 million annually in tax revenue.

Arizona

Marijuana Laws in Arizona

While the passing of Prop 203 legalized medical marijuana back in 2010, Arizona has come across some speed bumps in extending that status to recreational use. In 2016, an initiative to legalize recreational marijuana failed by a slim margin, only getting 49% of the vote. However, Arizona’s Smart and Safe Act will be appearing on the November 2020 ballot, and if passed it will allow adults to possess up to an ounce of marijuana and grow up to six plants at their home. 

How Much Money Would Arizona Make if Marijuana Were Legal?

With approximately 611,000 marijuana users in the state, if Arizona were to legalize marijuana and adopt the same tax structure as Colorado, they could collect approximately $197 million in tax revenue annually.

Arkansas

Marijuana Laws in Arkansas

The recreational use of marijuana remains illegal in Arkansas, with possession of even small amounts of the plant being a misdemeanor crime. Medical marijuana use, on the other hand, was legalized back in 2016 after Issue 6 was passed by a vote of 53%-47%.

How Much Money Would Arkansas Make if Marijuana Were Legal?

With a reported 201,000 marijuana users in Arkansas, the state could rake in approximately $65 million in tax revenue per year if they fully legalize cannabis use and adopt the same tax structure as Colorado.

Connecticut

Marijuana Laws in Connecticut

Cannabis is still illegal for recreational use in Connecticut, but there has been some progress in the way of decriminalization. Additionally, medical marijuana use has been permitted in the state since June 2012.

How Much Money Would Connecticut Make if Marijuana Were Legal?

According to the SAMHSA survey, approximately 347,000 marijuana users reside in Connecticut. With that, if Connecticut were to legalize pot, they’re projected to make $112 million in tax revenue per year.

Delaware

Marijuana Laws in Delaware

Similar to Connecticut, Delaware has decriminalized possession of small amounts and legalized medical cannabis, but recreational use remains illegal. 

How Much Money Would Delaware Make if Marijuana Were Legal?

Delaware has one of the smallest state populations in the nation (7th smallest, to be exact), but even still – there are a reported 85,000 users of marijuana. If marijuana were legalized, that could translate to approximately $27 in tax revenue each year. 

Florida

Marijuana Laws in Florida

Cannabis is illegal for recreational use in Florida, with possession of just 20 grams potentially leading to a year in prison. However, in 2016 Amendment 2 passed by a vote of 71% to 29%, legalizing the medical use of marijuana in Florida.

How Much Money Would Florida Make if Marijuana Were Legal?

With over 1.5 million Floridians using marijuana, the state could bring in a whopping $508 million annually if marijuana were legalized and they adopted the same taxing system as Colorado.

Georgia

Marijuana Laws in Georgia

Georgia’s cannabis laws have an awkward specificity to them. The recreational use of marijuana is illegal, but 10+ local governments within the state have decriminalized. As for medical marijuana, cannabis oil with up to 5% THC is permitted for medical use. 

How Much Money Would Georgia Make if Marijuana Were Legal?

Georgia is the home to approximately 658,000 marijuana users. If Georgia fully legalized the use of marijuana, those users could result in a projected $213 million in tax revenue on a yearly basis. 

Hawaii

Marijuana Laws in Hawaii

Though Hawaii is legendary for it’s grade-A kush, recreational cannabis use remains illegal in the Aloha State. Medical marijuana, however, was legalized as far back as the year 2000, but the program only allowed homegrown – failing to establish dispensaries. 

How Much Money Would Hawaii Make if Marijuana Were Legal?

If Hawaii legalized recreational marijuana and established a dispensary/taxation program similar to Colorado’s, the 97,000 marijuana users on the islands could help generate an approximate $31 million in annual tax revenue.

Idaho

Marijuana Laws in Idaho

Idaho has some of the strictest cannabis laws in the country, with marijuana use being illegal for all purposes. There have even been struggles with the legality of CBD in Idaho. A Senate Bill legalizing the use of CBD oil for treating cases of severe epilepsy was passed in 2015, but Gov. Otter vetoed the bill. Still CBD products containing 0% THC are permissible as long as it’s derived from an approved area of the plant.

How Much Money Would Idaho Make if Marijuana Were Legal?

Despite the strict cannabis laws, approximately 107,000 Idaho residents are marijuana users. If the Idaho legislature legalized marijuana, the state could be pulling in an additional $35 million in tax revenue every year.

Indiana

Marijuana Laws in Indiana

Indiana is similarly strict when it comes to cannabis laws. Marijuana use of any kind is illegal in Indiana, with CBD only being permitted as long as it contains less than 0.3% THC. 

How Much Money Would Indiana Make if Marijuana Were Legal?

Once again, despite stringent cannabis laws, Indiana residents are enjoying the benefits of weed. If Indiana capitalized on the 530,000 marijuana users in their state by legalizing all sale and use, they could be looking at $171 million in annual tax revenue.

Iowa

Marijuana Laws in Iowa

The only forms of cannabis that are legal in Iowa are CBD and cannabis oil containing 3% or less of THC – and even those products have proven to be contentious for state law enforcement. 

How Much Money Would Iowa Make if Marijuana Were Legal?

Over 170k Iowa residents are marijuana users. If Iowa were to legalize the sale and use of weed and these Iowans purchased from legal dispensaries, the state could gain $56 million in tax revenue annually. 

Kansas

Marijuana Laws in Kansas

Like the past few non-coastal states we’ve covered, marijuana use is illegal for all purposes in Kansas. The only form that it’s legal in is THC-free CBD oil. 

How Much Money Would Kansas Make if Marijuana Were Legal?

When it comes to percentage of population, Kansas is among the lowest states for cannabis use. However, approximately 140,000 Kansans still use marijuana, which could translate to $45 million in yearly tax revenue if the state legalized weed and adopted a similar tax system to its neighbor Colorado.

Kentucky

Marijuana Laws in Kentucky

Despite a storied history of hemp development, the only form of cannabis that’s legal in Kentucky is CBD. However, there have been current pushes toward legalization, with a medical marijuana bill passing in the House. However, it’s stalled in the senate due to the pandemic.

How Much Money Would Kentucky Make if Marijuana Were Legal?

With hemp’s deep roots in Kentucky’s history, it’s only fit that it’s reflected in approximately 284,000 Kentucky residents using marijuana. If Kentucky were to legalize marijuana and take advantage of the market demand in their state, there could be over $92 million in tax revenue collected each year.

Louisiana

Marijuana Laws in Louisiana

Though marijuana has been legal for medical use since 1991, it remains illegal for recreational use.

How Much Money Would Louisiana Make if Marijuana Were Legal?

With over 275k marijuana users in the state, if Louisiana legalized the sale and use of cannabis, the state could collect $89 million in yearly tax revenue alone.

Maryland

Marijuana Laws in Maryland

Though the recreational use of marijuana is illegal in Maryland, the possession of small amounts has been decriminalized and there has been a state-regulated medical program since 2012. 

How Much Money Would Maryland Make if Marijuana Were Legal?

If Maryland were to extend the legalization of marijuana to recreational use as well, the 469,000 users in the Free State could result in over $152 million in annual tax revenue.

Minnesota

Marijuana Laws in Minnesota

Recreational use is illegal in Minnesota, and though the state has had a medical marijuana program since 2014, it is one of the strictest in the country.

How Much Money Would Minnesota Make if Marijuana Were Legal?

Approximately 416k Minnesotans are marijuana users. If Minnesota were to legalize marijuana sales and use, the state is projected to collect $134 million in tax revenue – dependent on using a tax system similar to Colorado’s.

Mississippi

Marijuana Laws in Mississippi

While cannabis is illegal for medical and recreational use in Mississippi, possession of small amounts is decriminalized, and the use of CBD products is legal.

How Much Money Would Mississippi Make if Marijuana Were Legal? 

If Mississippi were to legalize and sell marijuana under a tax structure similar to Colorado’s, their 159k marijuana users could translate to $51 million of yearly tax revenue.

Missouri

Marijuana Laws in Missouri

The beautiful Gateway to the West has had legal medical marijuana since 2018, but their dispensaries are just now gearing up to sell cannabis. While the 2020 push toward recreational legalization was derailed by COVID-19, 2020 is looking promising for full legalization.

How Much Money Would Missouri Make if Marijuana Were Legal?

With over 400k reported users in the state, Missouri residents create quite the marijuana market. If the state could legalize marijuana and capitalize on those numbers, Missouri could be looking at a projected $132 in tax revenue each year.

Montana

Marijuana Laws in Montana

Medical cannabis has been legal in Montana since a ballot initiative back in 2004, and a ballot initiative to legalize recreational cannabis will be voted on in November. 

How Much Money Would Montana Make if Marijuana Were Legal?

Montana is projected to gather $39 million in tax revenue if they were to legalize cannabis with the same tax structure as Colorado.

Nebraska

Marijuana Laws in Nebraska

Nebraska is illegal for both medical and recreational purposes. Though there was a 2015 push toward limited legalization of medical marijuana, it was blocked by a Senate filibuster.

How Much Money Would Nebraska Make if Marijuana Were Legal?

Nebraska is home to a lot of corn – in addition to approximately 120,000 marijuana users. If Nebraska legalized marijuana, those 120,000 Nebraskans could result in $39 million in tax dollars collected.

New Hampshire

Marijuana Laws in New Hampshire

Possession of upt to ¾ of an ounce is decriminalized in New Hampshire, and the state has permitted medical marijuana use since 2013. 

How Much Money Would New Hampshire Make if Marijuana Were Legal?

Reportedly, 158k New Hampshire residents are marijuana users. With marijuana fully legalized and dispensaries selling pot, the state could collect a projected $51 million.

New Jersey

Marijuana Laws in New Jersey

While medical use is the only use legal in New Jersey, the issue of full legalization will be on the November 2020 ballot. 

How Much Money Would New Jersey Make if Marijuana Were Legal?

With nearly 560k marijuana users in the state, New Jersey is currently missing out on a projected yearly tax revenue gross of $181 million. 

New Mexico

Marijuana Laws in New Mexico

With decriminalization going into effect in July 2019 and a bill legalizing recreational use passing just a few months before, New Mexico is well on it’s way toward full legalization (as long as coronavirus doesn’t completely derail things).

How Much Money Would New Mexico Make if Marijuana Were Legal?

Over 15% of New Mexico’s residents use marijuana. Once the state is able to fully legalize and begin selling marijuana at dispensaries, if they have a tax structure similar to Colorado’s, New Mexico could be seeing $68 million in tax revenue every year.

New York

Marijuana Laws in New York

While the possession of small amounts of marijana has been decriminalized and medical marijuana has been permitted since 2014, recreational use isn’t legalized . . . yet. The Department of Health completed a study in 2018, showing that the legalization of weed would have economic, public health, and public safety benefits.

How Much Money Would New York Make if Marijuana Were Legal?

New York is home to an incredible 1.543 million cannabis users. If New York legalized marijuana and were able to convert those users into legal buyers, the state could collect a projected $499 million in tax revenue.

North Carolina

Marijuana Laws in North Carolina

The only legal form of cannabis in North Carolina is CBD oil, and that’s only for patients with intractable epilepsy. 

How Much Money Would North Carolina Make if Marijuana Were Legal?

Despite North Carolina’s extremely narrow marijuana laws, it’s the home to over 600k users. If converted into buyers in a legal marijuana market, those users could bring North Carolina over $200 million in yearly tax revenue.

North Dakota

Marijuana Laws in North Dakota

In North Dakota, medical marijuana and hemp cultivation are both legal. And though the state didn’t vote in favor of full legalization back in 2018, there are hopes that the movement can continue into the coming years. 

How Much Money Would North Dakota Make if Marijuana Were Legal?

Even with North Dakota’s sub-million population, there are 44,000 reported cannabis users in the state. If North Dakota were to legalize marijuana and adopt the same tax structure as Colorado, they could collect approximately $14 million annually in tax revenue.

Ohio

Marijuana Laws in Ohio

Since 1975, possessing up to 100 grams of marijuana has been decriminalized. Beyond that, cities like Dayton, Cincinnati, and Cleveland have gone on to enact their own reforms. And though Ohio has a medical program as well as their own regulated market, the state has yet to fully legalize.

How Much Money Would Ohio Make if Marijuana Were Legal?

With a reported 201,000 marijuana users in Ohio, if the state were to legalize marijuana and adopt the same tax structure as Colorado, they could collect approximately $247 million in tax revenue annually.

Oklahoma

Marijuana Laws in Oklahoma

When a referendum was passed by a 57%-43% vote in 2018, Oklahoma became the 30th state to legalize medical marijuana. Following close behind, it seems the state has potential to legalize recreational use very soon too.

How Much Money Would Oklahoma Make if Marijuana Were Legal?

Over 225k Oklahoma residents are marijuana users. If the Sooner State were to legalize the sale and use of weed, the state could gain $56 million in tax revenue annually. 

Pennsylvania

Marijuana Laws in Pennsylvania

Though it has been decriminalized in many of the state’s major cities, marijuana is not legal for recreational use in Pennsylvania. However, medical use was finally legalized back in 2016, and there have been further pushes very recently – calling for legalization to boost the pandemic-ridden economy. 

How Much Money Would Pennsylvania Make if Marijuana Were Legal?

With north of 860k Pennsylvanians using marijuana, the state could bring in an impressive $279 million annually if marijuana were legalized and the state legislature adopted the same tax structure as Colorado.

Rhode Island

Marijuana Laws in Rhode Island

While several proposals for legalization have been presented to Rhode Island’s state government, none have proceeded to ballot. However, marijuana has been legalized for medical use since 2006.

How Much Money Would Rhode Island Make if Marijuana Were Legal?

Over 17% of Rhode Island’s population uses marijuana. With those numbers – even with Rhode Island’s low population – sales could generate over $40 million in tax revenue. 

South Carolina

Marijuana Laws in South Carolina

In terms of cannabis legality, only low-THC CBD is permitted in South Carolina – with medical and recreational marijuana use still being outlawed. 

How Much Money Would South Carolina Make if Marijuana Were Legal?

If South Carolina were to legalize and sell marijuana under a tax system comparable to Colorado’s, the state’s 328k marijuana users could generate $106 million of yearly tax revenue.

South Dakota

Marijuana Laws in South Dakota

The bad news is that both medical and recreational marijuana use are currently illegal in South Dakota. The good news is that the South Dakota Constitutional Amendment A will be voted on this year, and if it passes, the bad news goes away!

How Much Money Would South Dakota Make if Marijuana Were Legal?

47,000 reported marijuana users will be voting in favor of the South Dakota Constitutional Amendment this November, and if that passes, the state could see upwards of $15 million in tax revenue per year.

Tennessee

Marijuana Laws in Tennessee

While at the state level, possession of even small amounts of marijuana is still considered a criminal misdemeanor – major cities like Nashville and Memphis have decriminalized on their own, and medical use has been legal since 2015.

How Much Money Would Tennessee Make if Marijuana Were Legal?

Over 450,000 Tennessee residents use marijiuana. If the country capital of the U.S. were to open the doors to legal marijuana, the state could see a projected $146 million in tax revenue.

Texas

Marijuana Laws in Texas

Before the 1970s, even the lowest amounts of marijuana could result in a criminal offense. Today, possession of up to two ounces can still get offenders 180 days in jail. Medical cannabis use is pretty heavily restricted as well, with only low-THC cannabis oil being permitted.

How Much Money Would Texas Make if Marijuana Were Legal?

A sizable 1.284 million Texans slip on their cowboy boots and tip their hats to cannabis. If the Lone Star state ever legalizes marijuana and is able to convert that 1.284 users into legal buyers, Texas could be collecting $415 million/year in tax revenue.

Utah

Marijuana Laws in Utah

Utah is often said to be the first state to ban cannabis, way back in 1915. Today, it still remains illegal recreationally, while the Utah Medical Cannabis Act passed in 2018, with dispensaries being set to open in 2021. 

How Much Money Would Utah Make if Marijuana Were Legal?

Utah is nearly the lowest ranked state when it comes to marijuana use. Still, 187k Utah residents are cannabis users. That type of market demand could bring the state nearly $45 million in tax revenue if cannabis were fully legalized.

Virginia

Marijuana Laws in Virginia

Though marijuana is illegal for all uses in Virginia, there have been recent strides that are pointing toward progress. Personal marijuana possession was decriminalized earlier this year, and the state government called for cannabis to be legalized eventually back in 2019.

How Much Money Would Virginia Make if Marijuana Were Legal?

It’s no surprise that the Virginia’s state government is hoping to legalize pot. With over 475,000 marijuana users in the state – if they were to legalize and adopt Colorado’s tax system – Virginia could see over $150 million in tax revenue.

West Virginia

Marijuana Laws in West Virginia

Medical cannabis bills were presented in West Virginia for five years straight before passing in 2017. But while medical use is legalized, recreational possession of just small amount is a misdemeanor crime. 

How Much Money Would West Virginia Make if Marijuana Were Legal?

Approximately 137k marijuana users reside in West Virginia. If West Virginia legalized the sale and use of cannabis, the state could collect a projected $44 million in yearly tax revenue.

Wisconsin

Marijuana Laws in Wisconsin

Aside from CBD oil and industrial hemp, cannabis is illegal in Wisconsin. However, there has been decriminalization on county and city levels. 

How Much Money Would Wisconsin Make if Marijuana Were Legal?

With over 400k marijuana users in the state, Wisconsin could make over $132 million in tax revenue if the state legislature legalized pot and developed a tax system similar to Colorado’s.

Wyoming

Marijuana Laws in Wyoming

Wyoming has arguably the strictest cannabis laws out of any state, with only CBD oil being permitted, and only for seizure treatment. Possession of up to 3 oz. can result in up to a year in jail, and anything over 3 oz. is considered a felony.

How Much Money Would Wyoming Make if Marijuana Were Legal?

Wyoming has the smallest population of any U.S. state. Even so, there are 34k reported marijuana smokers that help make up that population. If Wisconsin legalized marijuana, establishing taxes similar to Colorado’s, it could bring in a projected $11 million yearly,

The Federal Government

How Much Money Would the Federal Government Make if Marijuana Were Legal?

There are a lot of factors at hand when it comes to the subject of federal marijuana legalization. If the government chose to tax marijuana sales, that tax would impact prices across the industry – potentially affecting dispensary performance and overall market competitiveness. But if balanced correctly, it could establish some worthwhile cash flow at a state and federal level.

Depending on the type of tax enacted, the federal government could expect $800 million to over a billion dollars a year in tax revenue!

If you’d like to learn about individual states’ marijuana markets, check out these articles from The Weed Blog:

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