The U.S. Census Bureau reports $5.7 billion in cannabis tax revenue as of the third quarter of 2021

A recent report released by the US Census Bureau shows the trend in cannabis tax revenue for each state. It is the bureau’s first report of its kind and begins in the third quarter of 2021.

“The Quarterly State and Local Tax Revenue Summary provides quarterly estimates of state and local tax revenues nationally as well as detailed tax revenue data for individual states,” the report explains. “The information contained in this survey is the most current information available nationwide for state tax collections.”

The agency calls this data “an experimental product” but shows excise taxes collected since the third quarter of 2021. Washington and Colorado, the first two states to legalize cannabis, led the most in excise taxes collected, with $818.5 million and $648.1 million, respectively. However, data for Oregon, another early adopter of legalization, only raised a total of $364.6 million over the same period. On the other hand, California reached a total of $1.4 billion and Illinois collected $491 million during the same period. Newer markets like New York collected just $27.9 million, and Vermont, which only reported tax data for the fourth quarter of 2022, the first quarter of 2023 and the second quarter of 2023, recorded a total of $6.7 million .

The report included all 50 states, including those where cannabis is not currently legal (these were marked either “X” for no such tax or “NA” for data not yet available). However, the listing includes sales tax data from Washington D.C., which brought the total to $4.4 million.

Although the US Census Bureau published a table with all the data, it did not include automatic totals. However, manual addition shows that states with reported cannabis excise taxes have collected a total of $5.7 billion since the third quarter of 2021.

The agency also explained how ongoing data will be reported going forward. “Cannabis excise tax data reported for a given quarter generally represents taxes levied on sales in the prior quarter (i.e., data reported in September 2023 covers sales during the quarter ended June 30, 2023),” she said .

Many states reported record-breaking monthly sales figures, which are yet to appear in U.S. Census Bureau reports.

Illinois saw cannabis sales revenue increase in numerous months ($451.9 million in FY23) and exceeded the state’s alcohol sales revenue ($316.3 million in FY23). Michigan recently hit another revenue record in August, reporting $276 million in July 2023, although its earnings data isn’t as positive. Another record breaker was Massachusetts, which posted $152 million in June sales, bringing its total to $4.74 billion since 2018.

The bureau originally announced in 2021 that it would begin collecting data on both cannabis taxes and sports betting sales taxes. “Tax collection data is used to measure the economic activity of the country as a whole and to enable comparison between different states. Economists and public policy analysts use the data to assess general economic conditions and state and local government financial activities,” the agency said, according to an article in the Federal Register. “We plan to add cannabis and sports betting sales tax collection.”

The bureau also announced in August 2023 that it was working to update its 2022 Economic Census questions to take into account the rapidly growing cannabis industry. “It is important for the Census Bureau to keep pace with technological changes and ask the right questions in the right way to capture relevant information,” the U.S. Census Bureau said. “In preparation for this economic census, the Census Bureau worked extensively with industry experts and researchers to update the survey.

This report shows a real interest in merging cannabis sales and tax data to better track the industry’s progress nationwide.

A recent report from BDSA, a cannabis data analytics company, predicts that the global value of the cannabis industry could reach as much as $55 billion in 2027. Currently, BDSA expects newer cannabis markets to be the driving force behind this forecast. “New York, Missouri, New Jersey and Maryland are expected to experience significant market growth, with New York and New Jersey each expected to be $2.5 billion markets by 2027,” said Roy Bingham, co-founder and CEO of BDSA. “While mature markets like California and Colorado continue to face flat or declining sales, Michigan has emerged as an outlier and is expected to become a $3.8 billion market by 2027.”

BDSA also predicts a “return to moderate sales growth” in California by 2025, with sales rising again to $5.24 billion in 2027. But competitors like Canada are also expected to grow, with adult-use sales increasing by 2027 9% at the end of this year for a total of $4.6 billion, but a $200 million decline in medical cannabis sales by 2027.