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States That Legalized Marijuana Have Accumulated More Than $5.7 Billion In Tax Revenue Over 18 Month Period

The U.S. Census Bureau has unveiled its inaugural report on state-level marijuana tax revenue data, marking a significant step toward recognizing the cannabis industry as a legitimate sector of the economy. This comprehensive report covers an 18-month period, from July 2021 to the end of 2022, during which states collected an impressive $5.7 billion from licensed cannabis sales.

This milestone is part of the Census Bureau’s commitment to regularly update its data on cannabis taxation, indicating the federal government’s willingness to acknowledge the substantial revenue generated by state-level marijuana legalization. The agency’s decision to include marijuana tax figures in its quarterly summary of state and local government tax revenue reflects the growing importance of the cannabis industry.

The data encompass both medical and adult-use cannabis markets, making it the most extensive collection of state-level cannabis tax revenue figures to date. However, it does not differentiate between the two segments.

The report underscores the disparities in revenue generation among states, highlighting the size of individual state markets and their tenure in the cannabis industry. For example, Washington and Colorado, the first two states to legalize nonmedical marijuana, collected $818.5 million and $648.1 million in tax revenue, respectively. In contrast, California’s vast market yielded over $1.4 billion in sales tax revenue, while New York, with a limited number of retailers, generated just $27.9 million.

The Census Bureau’s approach to taxation is inclusive, encompassing not only taxes on cannabis transactions but also business license fees. However, it remains unclear whether the reported totals include sales tax figures alone or revenue from both categories.

The agency acknowledges potential discrepancies between its figures and state-reported data, as its definition of “state government” extends to agencies, institutions, commissions, and public authorities. This suggests that tax revenue retained by city and county governments may be included in the state numbers.

The reported data also deviates from conventional reporting periods, as cannabis excise sales taxes reported for a particular quarter generally represent taxes collected on sales from the prior quarter.

With the Census Bureau’s commitment to regular updates and a broader acceptance of cannabis as a revenue-generating industry, the future of the marijuana market in the United States appears more promising than ever.

Read the whole article here.

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