Cannabis Tax Rates: A State-by-state Guide

Cannabis taxes can be a pain in the pocketbook, but they keep cannabis legal and well managed. Tax rates vary dramatically from state to state. Many states tax medical cannabis at a very little level or not at all. Adult-use states tend to tax non-medical cannabis at so-called sin tax rates, 20% to 35% and higher, much like alcohol.
For some medical clients in adult-use states, it can be easier to purchase non-medical cannabis products and avoid the hassle of getting or renewing a medical card. For others, a $50 or $100 med card renewal might conserve them thousands in adult-use cannabis excise taxes.
An excise tax is a tax on a specific product-in this case, cannabis. Many states levy a cannabis excise tax in addition to the regular state sales tax. Some regional towns and counties may also add an extra 1% to 3% tax on top of that. It does accumulate.
Wondering where that money goes? Leafly has checked out California, Nevada, and Illinois, and also probed the question of cannabis money funding the police.
We will continue to upgrade this state-by-state guide as rates alter.
Cannabis tax rates in Alaska
Cannabis is taxed mostly at the wholesale level in Alaska, although regional town or district taxes might be imposed.
Adult-use retail sales: Purchases are not subject to any statewide cannabis tax, although some towns do charge a cannabis excise tax. Anchorage, Mat-Su Borough, Fairbanks, and Ketchikan all charge a 5% excise tax. Juneau charges 3%.
Medical cannabis: There is no cannabis excise tax on medical cannabis.
There is no statewide retail sales tax in Alaska. Local towns may impose a regional sales tax.
Wholesale: As of Jan. 1, 2019, mature bud and flower are taxed at $50 per ounce; immature or unusual bud is taxed at $25 per ounce; trim is taxed at $15 per ounce; and clones are taxed at a flat rate of $1 per clone.
More information: Alaska Department of Revenue.
Cannabis tax rates in Arizona
Adult-use retail sales: Purchases undergo a 16% cannabis excise tax in addition to a 5.6% statewide retail sales tax, bringing the overall to 21.6%.
Medical cannabis sales: Purchases go through a 6.6% state excise tax plus an extra 2-3% optional tax dictated by local municipalities.
To learn more, take a look at suitable pages on the Arizona Department of Health Services site here and here.
Cannabis tax rates in Arkansas
Medical cannabis sales: Purchases undergo the 6.5% statewide sales tax and an additional advantage tax of 4%, in addition to all relevant local taxes.
Additionally, dispensaries pay a 4% opportunity tax when they purchase items from growers.
For more information, take a look at this report on the Arkansas medical cannabis industry.
Cannabis tax rates in California
Adult usage retail sales: California has a statewide 15% cannabis excise tax, in addition to a state retail sales tax of 7.25%, and an automatic regional sales tax of up to 1%. Local municipalities may, at their discretion, add an additional services tax of approximately 15%. So a client may pay anywhere from 23% to 38% in tax.
Medical cannabis: Medical Marijuana Program purchases are exempt to the retail sales tax, but the 15% cannabis excise tax still uses. Municipalities are likewise able to slap a regional tax on medical cannabis purchases.
For additional information on California’s adult-use taxes, take a look at Leafly’s convenient explainer.
Cannabis tax rates in Colorado
Adult-use retail: Sales undergo a 15% cannabis excise tax and any additional local taxes.
Medical cannabis: Sales undergo a 2.9% state excise tax and any additional regional taxes.
Wholesalers are additionally based on a 15% excise tax, imposed on the very first transfer of cannabis to a processor or retailer.
For more information, have a look at significant files from the Colorado Department of Revenue here and here.
Cannabis tax rates in Connecticut
Medical cannabis: Purchases are only subject to the statewide retail sales tax of 6.35%.
To find out more, have a look at this bulletin on cannabis tax policy in Connecticut.
Cannabis tax rates in Delaware
Medical cannabis: There is no tax on medical cannabis. Delaware does not have a statewide retail sales tax.
To learn more, check out the Delaware Health and Human Services Department site
Cannabis tax rates in Florida
Medical cannabis: There is no excise tax on medical cannabis sales. Purchases are subject to the statewide retail sales tax of 6%.
Cannabis tax rates in Hawaii
Medical cannabis: There is no excise tax on medical cannabis in Hawaii. Purchases undergo the statewide retail sales tax of 4%, except on Oahu where the tax rate is 4.5%.
Learn more on the state’s Medical Marijuana Program website.
Cannabis tax rates in Illinois
Adult-use retail: Cannabis tax rates in Illinois are complex and mainly based on THC content. Generally, the greater the THC concentration, the higher the tax rate.
Infused food and beverages featured a 20% cannabis excise tax.
All other cannabis products consisting of 35% THC or less go through a 10% excise tax.
All other cannabis products including more than 35% THC go through a 25% excise tax.
On top of that there’s a 6.25% statewide retail sales tax, and possibly other local community taxes (which may add to 3%).
So, rough total out the door, expect your cannabis leaf to be taxed at 16%, edibles at 26%, and concentrates at 31%.
Medical cannabis: Purchases are subject just to the 1% statewide sales tax on qualifying drugs.
For more information, have a look at the Illinois Revenue Cannabis FAQ page.
Cannabis tax rates in Iowa
Medical cannabis: Purchases undergo the state retail sales tax of 6%, as well as additional regional taxes.
For more information, visit Iowa’s Office of Medical Cannabidiol website.
Cannabis tax rates in Louisiana
Medical cannabis: Purchases by clients are not subject to taxes.
Read the appropriate state legislation here.
Cannabis tax rates in Maine
Adult-use retail: Purchases undergo a 10% cannabis excise tax, plus the statewide 5.5% sales tax. No additional regional community taxes are permitted.
Medical cannabis: There are no cannabis excise taxes imposed on medical sales, but they are subject to the normal statewide sales tax of 5.5%-except for edibles, which are taxed at 8%. No extra local community taxes are permitted.
Wholesale: The excise tax on growers is $335 per pound of flowers, $94 per pound for trim, $1.50 per pound for seedlings and 35 cents per pound for seeds.
For more information, check out this helpful one-sheet from the Maine Municipal Association and this story from the Bangor Daily News.
Cannabis tax rates in Maryland
Medical cannabis: Purchases are not subject to the statewide sales tax. There are no excise taxes on medical cannabis.
For further info, check out this quick from the Maryland Government Finance Officers Association.
Cannabis tax rates in Massachusetts
Adult-use retail: Purchases undergo a 10.75% cannabis excise tax, plus the state’s regular 6.25% sales tax, and an optional local excise tax, up to 3%.
The result: Expect to pay roughly 17% to 20% tax as an out-the-door total.
Medical cannabis: Purchasers pay no taxes on medical cannabis.
To find out more, see the Massachusetts Department of Revenue site.
Cannabis tax rates in Michigan
Adult usage retail: Purchases undergo a 10% cannabis excise tax, and the statewide 6% sales tax.
Medical cannabis: Purchases are subject only to the statewide 6% sales tax.
To find out more, check out this analysis of Michigan cannabis taxes and the state Marijuana Regulatory Agency site.
Cannabis tax rates in Minnesota
To find out more, go to the Minnesota Department of Health website.
Cannabis tax rates in Mississippi
Medical cannabis: Mississippi voted to legalize medical cannabis in November, and the state’s program will hopefully come online this summer season, even though state lawmakers are actively working to undermine it by retroactively passing an alternate bill.
If the costs gone by citizens, Initiative 65, enters into effect, there technically will not be a tax for clients, but purchases will undergo a «user charge»-not to exceed state sales tax (7%) — that would be utilized solely to money the program itself.
For additional information, see the full text of Measure 65, the state’s medical cannabis legislation.
Cannabis tax rates in Missouri
Medical cannabis: Purchases go through a 4% tax. No extra taxes are enforced.
Learn more on the Missouri Department of Revenue website.
Cannabis tax rates in Montana
Adult use retail: Montana’s adult use program, which is projected to release in 2022, will include a 20% cannabis excise tax. There is no basic statewide sales tax in Montana.
Medical cannabis: Purchases undergo a 4% excise tax.
For additional information, take a look at the Montana Department of Revenue website.
Cannabis tax rates in Nevada
Adult use retail: Purchases go through a 10% cannabis excise tax, pluse the 4.6% statewide sales tax. Out the door, anticipate a total of roughly 15% added to your purchase for taxes.
Medical cannabis: Purchases are subject just to the 4.6% statewide sales tax.
Wholesale: There is a 15% cannabis excise tax imposed on wholesale sales and transfers.
For additional information, check out the Nevada Department of Taxation site.
Cannabis tax rates in New Hampshire
Medical cannabis: Purchases are exempt to any taxes. New Hampshire does not have a statewide retail sales tax.
For more details, go to the New Hampshire Therapeutic Cannabis Program site.
Cannabis tax rates in New Jersey
Medical cannabis: New Jersey remains in the process of slowly lowering taxes on medical cannabis purchases:
— 4% on sales made till June 30, 2021

— 2% on sales made between July 1, 2021, and June 30, 2022

— 0% on sales made on and after July 1, 2022

Adult usage retail: New Jersey’s recreational program is expected to come online later this year. Sales will go through the 6.625% statewide sales tax, but no particular cannabis excise tax. Local towns will be allowed to add an additional 2% sales tax. So anticipate to see an overall out-the-door tax of roughly 9%.
To find out more, see the New Jersey Treasury site.
Cannabis tax rates in New Mexico
Medical cannabis: Dispensaries are needed to pay a gross receipts tax, which differs throughout the state from 5.125% to 8.8125%. Some dispensaries factor this tax into the price of a purchase, and others tack it on at point of sale.
For more details, have a look at the New Mexico Medical Cannabis program site.
Cannabis tax rates in New York
Medical cannabis: Purchases are subject to a 7% medical cannabis excise tax, but are not subject to any statewide retail sales tax.
To learn more, checked out the suitable New York Department of Taxation and Finance memo.
Cannabis tax rates in North Dakota
Medical cannabis: Purchases are subject to North Dakota’s 5% statewide sales tax.
More details can be discovered on the program’s site.
Cannabis tax rates in Ohio
Medical cannabis: Purchases go through statewide sales tax, which ranges in between 6.5% and 7.25% depending upon the county.
For additional information, take a look at Ohio’s medical cannabis program site and this account of Ohio’s medical cannabis program.
Cannabis tax rates in Oklahoma
Medical cannabis: Purchases undergo a 7% medical cannabis excise tax, along with the 4.5% statewide sales tax and any extra local community taxes. Expect to pay roughly 12% or more in taxes out the door.
For additional information, see this Oklahoma tax assistance file.
Cannabis tax rates in Oregon
Adult-use: Purchases are subject to a 17% cannabis excise tax, in addition to an additional 3% local municipal tax. There is no statewide sales tax in Oregon.
Learn more about adult-use cannabis by means of the Oregon Department of Revenue, and more about the medical program through the Oregon Health Authority.
Cannabis tax rates in Pennsylvania
Medical cannabis: There is no tax on purchases by clients.
Wholesale: There is a 5% wholesale excise tax paid by growers/processors when they sell their wares to dispensaries.
To find out more, have a look at the Pennsylvania Medical Marijuana program.
Cannabis tax rates in Rhode Island
Medical cannabis: Purchases are subject only to the 7% statewide sales tax.
Additionally, Rhode Island’s «compassion centers» are required to pay the state an additional charge of 4% on a month-to-month basis. These centers may choose to pass along this additional charge, which is successfully a tax, to their clients.
For additional information, here are the state’s tax guidelines.
Cannabis tax rates in South Dakota
Adult use retail: The credibility of leisure legalization expense Amendment A, which South Dakota citizens passed in November, is presently being debated in the South Dakota courts. If the expense does enter into result, adult-use sales will go through a 15% cannabis excise tax, in addition to the statewide 4.5% sales tax.
Medical cannabis: South Dakota voted to legislate medical cannabis in Nov. 2020. When the effort is enacted, medical cannabis sales will not be taxed.
To learn more, check out Leafly’s coverage of South Dakota’s dual legalization costs.
Cannabis tax rates in Utah
Medical cannabis: There are no taxes on medical cannabis purchases.
To find out more, see the Utah Medical Cannabis Act.
Cannabis tax rates in Vermont
Adult usage retail: Recreational cannabis sales will undergo a 14% cannabis excise tax, and Vermont’s 6% statewide sales tax. Estimate roughly 20% in taxes out the door.
Medical cannabis: Purchases are not taxed.
For additional information, see this Vermont Department of Taxes record.
Cannabis tax rates in Virginia
Adult usage retail: Virginia’s adult-use stores, which are scheduled to open in 2024, will gather a 21% state cannabis excise tax in addition to the statewide 5.3% sales tax. An additional 3% tax may be added by the regional municipality.