A report published by the U.S. Census Bureau recently shows the progress of cannabis tax revenue numbers for each state. It’s the first report of its kind from the bureau and begins with the Q3 2021.
“The Quarterly Summary of State and Local Government Tax Revenue provides quarterly estimates of state and local government tax revenue at a national level, 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 on a nationwide basis for government tax collections.”
The agency refers to this data as “an experimental product,” but showcases excise taxes collected since Q3 2021. Washington and Colorado, the first two states to legalize cannabis, led with the most in collected excise sales taxes with $818.5 million and $648.1 million. Data for Oregon however, another early adopter of legalization, only collected a total of $364.6 million during the same time frame. On the other hand, California’s total reached $1.4 billion during the same period, and Illinois collected $491 million. Newer markets such as New York collected just $27.9 million, and Vermont, which only reported tax data for Q4 2022, Q1 2023, and Q2 2023, showed a total of $6.7 million.
The report included all 50 states, even those that do not currently have legal cannabis implemented (those were signified as either an “X” for no such tax, or “NA” for data not yet available). However, the listing does include sales tax data from Washington D.C., which revealed a total of $4.4 million.
While the U.S. Census Bureau published a spreadsheet with all of the data, it did not include automatic totals. However, manual addition reveals that states with reported cannabis excise sales tax numbers totaled out to $5.7 billion since Q3 of 2021.
The agency also explained how ongoing data will be reported going forward. “Data for cannabis excise sales taxes reported for a particular quarter generally represent taxes collected on sales made during the prior quarter (i.e. data released in September 2023 will cover sales during the quarter ended June 30, 2023),” she said.
Many states reported record-breaking numbers for monthly sales revenue, which also won’t be showing on the U.S. Census Bureau reports yet.
Illinois had numerous months showing increases in cannabis sales revenue ($451.9 million in FY23) and passing the state’s alcohol sales revenue ($316.3 million in FY23). Michigan recently hit another sales record in August, showing $276 million in July 2023, although the data regarding profits is not as positive. Another record breaker was Massachusetts, which reached sales of $152 million in June for a total of $4.74 billion since 2018.
The bureau originally announced in 2021 that it would begin to collect data on both cannabis taxes, as well as sports betting sales taxes. “Tax collection data are used to measure economic activity for the Nation as a whole, as well as for comparison among the various states. Economists and public policy analysts use the data to assess general economic conditions and state and local government financial activities,” the agency explained, according to an article on the Federal Register. “We plan to add the collection of cannabis and sports betting sales taxes.”
The bureau also announced in August 2023 that it’s working on updating its 2022 Economic Census survey questions with the rapidly growing cannabis industry in mind. “It is important for the Census Bureau to keep up with changes in technology and ask the right questions the right way to capture relevant information,” the U.S. Census Bureau stated. “In preparation for this economic census, the Census Bureau worked extensively with industry experts and researchers to update the survey.
This report shows a genuine interest in uniting cannabis sales and tax data in order to better track the industry’s progress on a nationwide scale.
A recent report from BDSA, a cannabis data analytic company, projects that the global value of the cannabis industry could reach up to $55 billion in 2027. Currently, BDSA shows newer cannabis markets as the driving force for this projection. “New York, Missouri, New Jersey and Maryland are set to experience significant market growth, with New York and New Jersey each projected to be $2.5 billion markets by 2027,” said BDSA co-founder and CEO, Roy Bingham. “While mature markets like California and Colorado continue to face stagnating or declining sales, Michigan has emerged as an outlier and is expected to become a $3.8 billion market by 2027.”
BDSA also forecasts a “return to modest sales growth” in California by 2025, with a rebounding increase in sales to $5.24 billion in 2027. But competitors such as Canada are also expected to grow, with a 9% increase in adult-use sales by the end of this year, for a total of $4.6 billion, but a decrease in sales from medical cannabis by $200 million by 2027.
The bureau’s first compiled report on individual state cannabis tax revenue data will be published quarterly going forward. Read More