In what may be yet another sign that the federal government is taking a keener interest in legitimizing the cannabis industry, the U.S. Census Bureau published an interactive map that gives a closer look at how cannabis taxes have contributed to state revenues.
The “experimental data product” includes data from the third quarter of 2021 to second quarter 2023.
Only five states reported that cannabis taxes made up more than 1% of their total tax coffers in the latest quarter:
- Oregon, 3.19%
- Michigan, 2.16%
- Illinois, 2.04%
- Alaska, 1.32%
- Colorado, 1.21%
Despite boasting the widest contribution, Oregon also saw its tax collection figure decline nearly 8% from the first quarter. Illinois and Colorado also saw sequential declines, down 3.72% and 0.33%, respectively.
Alaska, on the other hand, reported that quarterly collected tax revenue shot up 18.35%.
The directionality could indicate the stability and maturity of the markets being analyzed. Alaska’s regulatory board has been implementing significant changes to the market in an effort to boost overall sales, while Colorado, which was the first state with a regulated adult-use cannabis market, saw the smallest sequential change in tax revenue.
Despite being a fraction of the overall state tax revenues, the revenue generated by the sector is meaningful. Illinois reported a $451.9 million revenue from cannabis in the fiscal year ending June, significantly more than its $316.3 million from alcohol taxes, according to comparisons from Marijuana Moment. In 2022, both Colorado and Washington saw higher tax revenues from the plant than from alcohol or tobacco.
The Census Bureau, in its methodology notes, said the revenue data is based on a complete survey of state government agencies. It defines “taxes” broadly, covering all mandatory contributions by a government for public purposes, including interest and penalties.
Some states, such as Washington, were not included in the dataset because the Census Bureau was unable to retrieve such data from a state agency or through administrative channels. The agency also warns against using the dataset to estimate national totals for cannabis tax receipts or sales, due to the lack of data from key markets.
The Census report does not encompass most sales of this year, during which some states have reported record sales numbers.