Cannabis tax rates by state run from about 10% to 37% in excise tax, and most legal states add standard sales tax and local add-on taxes on top of that. The final number depends on three things: how the state measures the tax (retail price, wholesale price, weight, or THC content), where in the supply chain the tax is collected, and which city or county you shop in. Two stores in the same state can charge different totals for the same product.
which state has highest cannabis tax
How cannabis taxes stack up at the register
Legal states tax cannabis through more than one channel. The excise tax is the cannabis-specific charge, and it stays separate from the sales tax that applies to ordinary goods.
- Excise tax: a cannabis-only tax, set as a percentage of retail price, a percentage of wholesale price, a flat amount per ounce, or a charge tied to THC milligrams.
- Sales tax: the state and local tax on most goods, charged on top of the excise tax in states such as Massachusetts, Michigan, and Arizona.
- Local taxes: city and county add-ons that vary by address, common in California, Colorado, and Oregon.
Some states also split the rate by product. Flower, concentrates, edibles, and beverages can each carry a different percentage.
Cannabis tax rates by state: common examples
These are state-level figures for adult-use sales. Local taxes and rate changes mean the total at the register can land higher.
cannabis excise tax by state 2024
- Washington: 37% excise tax on retail sales, plus local sales tax.
- Colorado: 15% excise tax on wholesale (based on average market rate) and a 15% retail marijuana sales tax, plus state and local sales taxes.
- California: 15% excise tax on retail sales, plus sales tax and city cannabis business taxes.
- Massachusetts: 10.75% excise tax plus 6.25% state sales tax.
- Michigan: 10% excise tax plus 6% state sales tax.
- Arizona: 16% excise tax on retail sales plus standard sales tax.
- Nevada: 10% retail excise tax plus local sales tax.
- New York: 9% state excise plus 4% local excise, collected at the distributor level.
- New Jersey: 6.625% sales tax plus a 2% municipal tax on retail sales.
- Oregon: 17% state retail tax plus local taxes of up to 3%.
- Maine: 10% excise tax plus 5.5% state sales tax.
Which states tax cannabis by weight or THC content?
Not every state uses a percentage of price. Some charge by the ounce, and others scale the rate to potency.
- Alaska: taxes flower by weight at the wholesale level, with the mature flower rate at $50 per ounce and lower rates for other plant material.
- Illinois: taxes adult-use flower at 10%, 20%, or 25% of retail price depending on THC level, and concentrates sit in the top tier.
- Connecticut: pairs a 6.35% sales tax with a tax based on THC content.
- Montana: charges 20% on adult-use retail sales and 4% on medical sales.
Why two shops in one state can charge different totals
State rate tables tell only part of the story. Three factors move the final price.
- Point of collection: New York collects its excise tax at the distributor level, so the shelf price may already include it. Washington adds its excise tax at the register.
- Local jurisdiction: a city tax of 3% or more changes the math in California, Illinois, and Colorado.
- Product type and patient status: concentrates and edibles can sit in a higher tier, and medical patients often pay less.
How to check the cannabis tax rate that applies to you
- Open your state department of revenue page and find the cannabis or marijuana tax section.
- Check your city and county codes for a local cannabis tax.
- Read the tax lines on your dispensary receipt. Most systems itemize state excise, state sales, and local tax apart from the shelf price.
- Ask the budtender which rate applies to your product category.
Rates move. Legislatures adjust excise levels and tiers between sessions, so a figure from two years ago may not match today's receipt.
Common questions about cannabis tax rates
Do medical cannabis patients pay the same tax?
Not in many states. Montana charges medical patients 4% against 20% for adult use. Colorado exempts medical cannabis from the 15% retail marijuana sales tax. Other states drop the sales tax for patients with a valid card.
Is the excise tax included in the shelf price?
It depends on the state. Where the tax is collected at the distributor or wholesale level, the displayed price often covers it. Where the tax applies at retail, the register adds it to the subtotal.
Do cannabis tax rates change often?
They change when a legislature acts, which can happen in any session. Rate changes, new local options, and revised THC tiers show up with little notice, so confirm the current rate with your state revenue office before you budget a large purchase.
Which state has the highest cannabis tax rate?
Washington's 37% excise tax is the highest single state rate among legal adult-use markets. Totals climb past that in some cities once local taxes are added.