Cannabis Tax Rates: A State-by-state Guide

Cannabis taxes can be a pain in the pocketbook, however they keep cannabis legal and well regulated. Tax rates differ drastically from state to state. Many states tax medical cannabis at a minimal level or not at all. Adult-use states tend to tax non-medical cannabis at so-called sin tax rates, 20% to 35% and greater, similar to alcohol.
For some medical clients in adult-use states, it can be easier to purchase non-medical cannabis products and skip the trouble of getting or renewing a medical card. For others, a $50 or $100 med card renewal may save them thousands in adult-use cannabis import tax taxes.
An excise tax is a tax on a particular product-in this case, cannabis. Many states impose a cannabis excise tax in addition to the routine state sales tax. Some regional towns and counties may likewise add an extra 1% to 3% tax on top of that. It does accumulate.
Wondering where that money goes? Leafly has actually looked into California, Nevada, and Illinois, and likewise penetrated the concern of cannabis cash funding the police.
We will continue to upgrade this state-by-state guide as rates change.
Cannabis tax rates in Alaska
Cannabis is taxed primarily at the wholesale level in Alaska, although local town or borough taxes may 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 might impose a local sales tax.
Wholesale: As of Jan. 1, 2019, fully grown 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 info: 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 total to 21.6%.
Medical cannabis sales: Purchases go through a 6.6% state excise tax plus an additional 2-3% optional tax dictated by local municipalities.
To learn more, take a look at applicable pages on the Arizona Department of Health Services website here and here.
Cannabis tax rates in Arkansas
Medical cannabis sales: Purchases are subject to the 6.5% statewide sales tax and an additional privilege tax of 4%, as well as all appropriate local taxes.
Additionally, dispensaries pay a 4% benefit tax when they buy products from cultivators.
For additional information, take a look at this report on the Arkansas medical cannabis industry.
Cannabis tax rates in California
Adult use retail sales: California has a statewide 15% cannabis excise tax, in addition to a state retail sales tax of 7.25%, and an automated local sales tax of as much as 1%. Local towns may, at their discretion, tack on an additional organizations tax of up to 15%. So a consumer might pay anywhere from 23% to 38% in tax.
Medical cannabis: Medical purchases are exempt to the retail sales tax, however the 15% cannabis excise tax still uses. Municipalities are likewise able to slap a local tax on medical cannabis purchases.
To find out more on California’s adult-use taxes, have a look at Leafly’s handy explainer.
Cannabis tax rates in Colorado
Adult-use retail: Sales go through a 15% cannabis excise tax and any additional regional taxes.
Medical cannabis: Sales go through a 2.9% state excise tax and any extra local taxes.
Wholesalers are in addition subject to a 15% excise tax, levied on the very first transfer of cannabis to a processor or retailer.
To learn more, check out important documents from the Colorado Department of Revenue here and here.
Cannabis tax rates in Connecticut
Medical cannabis: Purchases are just subject to the statewide retail sales tax of 6.35%.
For more information, have a look at this publication 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 website
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 go through the statewide retail sales tax of 4%, other than on Oahu where the tax rate is 4.5%.
Discover more on the state’s Medical Marijuana Program site.
Cannabis tax rates in Illinois
Adult-use retail: Cannabis tax rates in Illinois are intricate and mostly based upon THC material. Generally, the higher the THC concentration, the greater the tax rate.
Infused food and beverages included a 20% cannabis excise tax.
All other cannabis items containing 35% THC or less undergo a 10% excise tax.
All other cannabis items including more than 35% THC are subject to a 25% excise tax.
On top of that there’s a 6.25% statewide retail sales tax, and possibly other regional municipal taxes (which may run up to 3%).
So, rough overall out the door, anticipate 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 certifying drugs.
For more details, have a look at the Illinois Revenue Cannabis FAQ page.
Cannabis tax rates in Iowa
Medical cannabis: Purchases go through the state retail sales tax of 6%, in addition to extra local taxes.
For additional information, see Iowa’s Office of Medical Cannabidiol site.
Cannabis tax rates in Louisiana
Medical cannabis: Purchases by clients are exempt to taxes.
Read the suitable state legislation here.
Cannabis tax rates in Maine
Adult-use retail: Purchases go through a 10% cannabis excise tax, plus the statewide 5.5% sales tax. No additional regional municipal taxes are permitted.
Medical cannabis: There are no cannabis excise taxes troubled medical sales, but they go through the typical statewide sales tax of 5.5%-except for edibles, which are taxed at 8%. No additional regional municipal 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, have a look at 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 exempt to the statewide sales tax. There are no import tax taxes on medical cannabis.
For more details, have a look at this short from the Maryland Government Finance Officers Association.
Cannabis tax rates in Massachusetts
Adult-use retail: Purchases go through a 10.75% cannabis excise tax, plus the state’s normal 6.25% sales tax, and an optional local excise tax, as much as 3%.
The result: Expect to pay approximately 17% to 20% tax as an out-the-door total.
Medical cannabis: Purchasers pay no taxes on medical cannabis.
For more details, see the Massachusetts Department of Revenue website.
Cannabis tax rates in Michigan
Adult usage retail: Purchases are subject to 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, have a look at this analysis of Michigan cannabis taxes and the state Marijuana Regulatory Agency site.
Cannabis tax rates in Minnesota
For more information, visit the Minnesota Department of Health site.
Cannabis tax rates in Mississippi
Medical Cannabis Doctors Near Me cannabis: Mississippi voted to legislate medical cannabis in November, and the state’s program will hopefully come online this summertime, despite the fact that state legislators are actively working to weaken it by retroactively passing an alternate expense.
If the costs passed by citizens, Initiative 65, goes into effect, there technically will not be a tax for patients, however purchases will be subject to a «user charge»-not to surpass state sales tax (7%) — that would be used exclusively to money the program itself.
To learn more, see the complete text of Measure 65, the state’s medical cannabis legislation.
Cannabis tax rates in Missouri
Medical cannabis: Purchases undergo a 4% tax. No additional taxes are enforced.
Learn more on the Missouri Department of Revenue site.
Cannabis tax rates in Montana
Adult usage 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 go through a 4% excise tax.
To find out more, check out the Montana Department of Revenue website.
Cannabis tax rates in Nevada
Adult usage retail: Purchases go through a 10% cannabis excise tax, pluse the 4.6% statewide sales tax. Out the door, expect a total of approximately 15% contributed 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 troubled wholesale sales and transfers.
For additional information, check out the Nevada Department of Taxation website.
Cannabis tax rates in New Hampshire
Medical cannabis: Purchases are not subject to any taxes. New Hampshire does not have a statewide retail sales tax.
To learn more, visit the New Hampshire Therapeutic Cannabis Program website.
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 until 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, however no particular cannabis excise tax. Local towns will be permitted to tack on an additional 2% sales tax. So expect to see a total out-the-door tax of approximately 9%.
To find out more, see the New Jersey Treasury site.
Cannabis tax rates in New Mexico
Medical cannabis: Dispensaries are required to pay a gross invoices tax, which varies throughout the state from 5.125% to 8.8125%. Some dispensaries element this tax into the rate of a purchase, and others tack it on at point of sale.
For additional information, have a look at the New Mexico Medical Cannabis program site.
Cannabis tax rates in New York
Medical cannabis: Purchases undergo a 7% medical cannabis excise tax, however are not subject to any statewide retail sales tax.
For more details, checked out the suitable New York Department of Taxation and Finance memo.
Cannabis tax rates in North Dakota
Medical cannabis: Purchases go through North Dakota’s 5% statewide sales tax.
More info can be found on the program’s site.
Cannabis tax rates in Ohio
Medical cannabis: Purchases go through statewide sales tax, which ranges between 6.5% and 7.25% depending upon the county.
For more information, check out Ohio’s medical cannabis program site and this account of Ohio’s medical cannabis program.
Cannabis tax rates in Oklahoma
Medical cannabis: Purchases are subject to a 7% medical cannabis excise tax, as well as the 4.5% statewide sales tax and any additional local community taxes. Expect to pay approximately 12% or more in taxes out the door.
To find out more, see this Oklahoma tax guidance file.
Cannabis tax rates in Oregon
Adult-use: Purchases go through a 17% cannabis excise tax, along with an extra 3% regional municipal tax. There is no statewide sales tax in Oregon.
Find out 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 patients.
Wholesale: There is a 5% wholesale excise tax paid by growers/processors when they sell their wares to dispensaries.
For more information, have a look at the Pennsylvania Medical Marijuana program.
Cannabis tax rates in Rhode Island
Medical cannabis: Purchases are subject just 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 regular monthly basis. These centers might pick to pass along this additional charge, which is efficiently a tax, to their patients.
For more information, here are the state’s taxation rules.
Cannabis tax rates in South Dakota
Adult use retail: The validity of leisure legalization bill Amendment A, which South Dakota voters passed in November, is presently being debated in the South Dakota courts. If the costs does go into impact, adult-use sales will undergo 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 initiative is enacted, medical cannabis sales will not be taxed.
For more details, have a look at Leafly’s protection of South Dakota’s double legalization costs.
Cannabis tax rates in Utah
Medical cannabis: There are no taxes on medical cannabis purchases.
For additional information, see the Utah Medical Cannabis Act.
Cannabis tax rates in Vermont
Adult use retail: Recreational cannabis sales will undergo a 14% cannabis excise tax, and Vermont’s 6% statewide sales tax. Estimate approximately 20% in taxes out the door.
Medical cannabis: Purchases are not taxed.
For more details, see this Vermont Department of Taxes record.
Cannabis tax rates in Virginia
Adult use retail: Virginia’s adult-use shops, 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 extra 3% tax might be added by the regional municipality.