The winner in a high tax states vs low tax states comparison for cannabis shoppers is Oregon. Oregon applies one 17% state retail tax and has no statewide sales tax, so a $40 shelf price lands around $47 at the register. States such as Illinois and Washington stack excise taxes on top of sales tax and can push the total well past 30%.
Which state wins the high tax vs low tax comparison?
Oregon wins because it does not stack taxes. One retail rate applies to the sale, and no general sales tax is added on top, which keeps the receipt short and predictable.
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Michigan and Maine are close runners up with combined rates in the mid teens. Colorado sits in the middle once state sales tax and local cannabis surcharges are added.
High tax states vs low tax states at a glance
- High tax: Illinois, Washington, and California layer excise, sales, and local taxes. Illinois can pass 30% depending on product potency and municipality.
- Low tax: Oregon, Maine, and Michigan keep combined rates in the teens.
- Mixed: Colorado and Nevada run moderate state rates but allow local add-ons that move the final number.
Why do high tax states charge more for cannabis?
Excise tax is applied before sales tax
Excise tax is charged on the product first, then sales tax is charged again on the taxed total in some states. That chain is why a modest sounding 15% can compound into a much larger bill.
Potency and weight based taxes
Some states tax by milligrams of THC or by product weight instead of by price. A high potency item can carry a far bigger tax load than the sticker implies.
Local add-ons
Cities and counties add their own cannabis business taxes and sales surcharges. Two shops a few miles apart can charge different totals for the same product.
Does a low tax state always mean a lower price?
No. Wholesale cost, license supply, and store competition move shelf prices more than a few tax points in many markets. A low tax state with tight product supply can still be expensive.
At Eden Cannabis, online and in-store menus show the pre-tax price so you can see exactly what the tax line adds.
How to check your real tax rate
- Note the shelf price before you reach the register.
- Find the cannabis excise line and the sales tax line separately on the receipt.
- Divide total tax by the shelf subtotal to get your true rate.
Licensed counters must itemize those lines, which makes the comparison easy to repeat in another state.
Frequently asked questions
Which state has the highest cannabis tax?
Washington consistently ranks near the top with a 37% excise tax applied before sales tax. Illinois can rival it on high potency products.
Do medical cannabis patients pay the same tax?
Many states reduce or waive excise tax for registered medical patients. Recreational buyers usually pay the full stacked rate.
Why do these rates change so often?
Legislatures adjust rates to balance revenue against legal market share. Confirm current rates before you budget a purchase.