Marijuana sales tax in Washington, U.S. 2015-2018

One of the major benefits of legalizing cannabis in the United States, according to activists, is the increase in tax revenue. In Washington state, excise tax revenue totaled nearly 65 million U.S. dollars in 2015. By 2018, this figure had nearly doubled to 120.62 million dollars. Sales growth was 242 percent in the second year of legalization but has since declined. The decline is expected to continue as the market matures, dropping to 19 percent by 2020.

Washington cannabis tax scheme

Washington state applies a 37 percent excise tax to the sale of cannabis after initially having a tiered system that taxed producers, processors and retailers 25 percent each. Fifty-five percent of the revenue generated by cannabis taxes in Washington are allocated for healthcare, the rest is distributed between various marijuana education and prevention programs.

The U.S. cannabis market

In 2017, the total revenue from cannabis specific state taxes on recreational and medical cannabis reached 610 million U.S. dollars. By 2020, tax revenue is expected to triple to 1.8 billion dollars. By that time, California is expected to be the largest market, worth an estimated 3.1 billion dollars. Washington state’s market is forecast to be valued at 1.6 billion dollars.