The regulated cannabis industry has proven to be a key driver of tax revenue generation in states that have legalized adult-use cannabis. By setting modest tax rates on regulated cannabis sales at the state and local levels, policymakers have managed to unlock a substantial source of new tax revenue that can be dedicated to public education, infrastructure repair, and other government services. In 2018, seven states with regulated cannabis markets (Alaska, California, Colorado, Massachusetts, Nevada, Oregon, and Washington) generated more than $1 billion in cannabis tax revenue. Colorado alone generated $266 million last year.

Source: Marijuana Tax Data, Colorado Department of Revenue, Feb. 2019, www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data; Washington State Liquor and Cannabis Board. “Marijuana Sales Activity by License Number – Traceability Contingency Reporting.” Washington State Liquor and Cannabis Board, Mar. 2019; Oregon Department of Revenue. “Oregon Marijuana Tax Statistics: Accounting Information.” Oregon Department of Revenue, Feb. 2019; Alaska Department of Revenue, Tax Division. Marijuana Tax Reports, Alaska Department of Revenue, Tax Division, Jan. 2019, tax.alaska.gov/programs/programs/reports/index.aspx?60000. Reports cover January 2018 through December 2018; Nevada Department of Taxation. “Marijuana Tax Revenue – Fiscal Year 2018.” Nevada Department of Taxation, Aug. 2018; Nevada Department of Taxation. “Marijuana Tax Revenue – Fiscal Year 2019.” Nevada Department of Taxation, Feb. 2019; Cannabis Control Commission. “Retail Marijuana Establishment Sales Data: 12/31/2018-01/06/2019.” Cannabis Control Commission, Jan. 2019; “California Department of Tax and Fee Administration Reports Cannabis Tax Revenues for Fourth Quarter of 2018.” California Department of Tax and Fee Administration, 19 Feb. 2019, www.cdtfa.ca.gov/news/19-02.htm; “California Department of Tax and Fee Administration Reports Cannabis Tax Revenue Increases in Third Quarter of 2018.” California Department of Tax and Fee Administration, 14 Nov. 2018, www.cdtfa.ca.gov/news/18-58.htm; “Cannabis Tax Revenue Increases In 2nd Quarter of 2018 Rise Shows Compliance Trend Growing.” California Department of Tax and Fee Administration, 15 Aug. 2018, www.cdtfa.ca.gov/news/18-41.htm; and “Cannabis Tax Revenues Total $60.9 Million in First Quarter.” California Department of Tax and Fee Administration, 11 May 2018, www.cdtfa.ca.gov/news/18-25.htm.