Federal Census Bureau Updates Marijuana Tax Revenue Map: Insights from March 25, 2024
As the U.S. Census Bureau continues to track the proportion of state revenue derived from marijuana taxes, we delve into the latest findings. In the fourth quarter of 2023, New York saw a 49% increase in excise tax revenue from marijuana sales, reaching $14.8 million.
Colorado, the first state to legalize retail cannabis, experienced a 9.05% decrease in marijuana tax revenue, amounting to $61.0 million. Recent standout changes include Connecticut’s 150% increase in tax revenue and declines in Rhode Island and Washington, D.C.
Washington State, Alaska, Colorado, and Montana led in cannabis tax revenue proportion, while states like Rhode Island and Pennsylvania lagged behind. Despite being a small fraction of total tax revenues, marijuana sales contribute significantly to state coffers.
The Census Bureau’s data now cover from the third quarter of fiscal year 2021 to the fourth quarter of 2023. Despite variations in state reporting practices, the project underscores the federal government’s growing effort to account for the legal cannabis industry’s economic impact.
Illinois’s $451.9 million revenue from the legal marijuana industry outpaced alcohol taxes, reflecting the industry’s economic significance. Colorado and Washington received more tax revenue from cannabis than alcohol or cigarettes in fiscal year 2022.
The Census Bureau’s map and recent updates reflect a decade-long acknowledgment of the economic activity resulting from state-level marijuana legalization. The data, obtained from all state government agencies, highlight the industry’s growing recognition at the federal level.
The bureau’s tracking and reporting efforts indicate a willingness to understand the economic implications of state-level marijuana legalization. Recent milestones, like Massachusetts’s $7 billion in combined sales and New Mexico’s $1 billion in total sales, underscore the industry’s growth.
TD Cowen’s projection of $37 billion in legal cannabis sales by 2027 indicates substantial growth potential. This growth may be fueled by increased substitution of cannabis for alcohol, especially among younger adults.
This article was inspired by insights from Ben Adlin.
