America Counts: Stories Behind the Numbers

How States Get Their Cut of the Cannabis Industry

While cannabis remains illegal federally, 30 states and the District of Columbia (D.C.) collect excise taxes on cannabis sales. Their contributions to state tax receipts have reached new heights: an estimated $3.55 billion in combined tax revenue between July 2025 and June 2026.

And the numbers keep growing.

When the U.S. Census Bureau began collecting cannabis excise tax revenue data in 2021 as part of the Quarterly Summary of State and Local Government Tax Revenue (QTAX) survey, only 19 states and D.C. imposed a cannabis excise tax. In the 5 years since, 11 more states entered the market for a total of 31, including D.C.

Alabama became the latest entrant when medical-only sales began in May 2026.

Since the bureau began tracking the data, total cannabis tax revenue increased 15.7%, rising from $3.06 billion in fiscal year (FY) 2022 to $3.55 billion in FY 2026.

Continue reading to learn more about this growing industry and its impact on state tax revenue. 

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