Washington state’s marijuana tax has raised more than $3B

Washington state's tax coffers are much higher because of legal marijuana.

That’s according to a recent report by the Marijuana Policy Project (MPP), a Washington, D.C.-based group advocating for legal reforms on cannabis. The report looks at tax revenue generated from state-legal, adult-use cannabis since 2014 when sales began in Colorado and Washington state.

For every $1 billion in revenue collected from the state’s cannabis retail tax, nearly $600 million is funneled into public health initiatives, including a fund that provides health insurance for low-income families.

Marijuana is big business Washington, one of 18 states with laws that legalize, tax, and regulate cannabis for adults 21 and older. In Washington state, a 37% excise tax is levied on the retail transaction price. The state levies a 6.5% sales tax.

Washington state collected an estimated $480.9 million in marijuana tax revenue through the first nine months of 2021, not counting millions more in local taxes levied by cities and towns where recreational pot is sold in retail establishments, according to the report. Local taxes totaled an estimated $188.3 million from July 2014 through October 2021, per the report.

In 2020, the figure for statewide marijuana tax revenue was an estimated $614.5 million, and in 2019 it was $477.3 million. The Evergreen State collected a higher amount of tax revenue from legal marijuana than the state did from alcohol in those two fiscal years, the report notes.

During the June 2014–October 2021 time period, marijuana tax revenue is estimated to have filled state coffers with more than $3 billion.

Washington is a pot-pioneering state. It became one of the first two states, along with Colorado, to legalize adult recreational use of marijuana when voters passed Initiative 502 on Nov. 6, 2012.

Marijuana has since become more mainstream than ever, not just in Washington state but throughout the nation, if the money generated by legal weed is any indication.

As of December 2021, states reported a combined total of $10.4 billion in tax revenue from legal, adult-use cannabis sales, with more than $3 billion reported so far for last year, according to the report.

The other 16 states that legalize, tax, and regulate marijuana are Alaska, Arizona, California, Connecticut, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Mexico, New Jersey, New York, Oregon, Vermont, and Virginia.

“States that have legalized cannabis for adults are reaping significant economic benefits,” said Karen O’Keefe, MPP’s director of state policies, in a press release. “The legal adult-use cannabis industry has now generated over $10 billion in new tax revenue, and in many instances that revenue is being distributed to much needed public services and programs, including reinvesting in communities that were devastated by the war on drugs. This is in stark contrast to prohibition, which costs taxpayers billions of dollars each year to enforce.”