Cannabis excise taxes rose during the 2026 fiscal year, marking the third straight year of growth.
According to the U.S. Census Bureau, 30 states and the District of Columbia (D.C.) collect excise taxes on cannabis sales. Their contributions to state tax receipts totaled an estimated $3.55 billion in combined tax revenue between July 2025 and June 2026.
The report shows that Washington and Montana lead the way in excise tax collected per resident, due to relatively high retail excise taxes. At the same time, Alaska collected nearly $35 per resident without using a retail tax. Instead, the state relies on $50-per-ounce cultivation tax applied when cannabis is transferred to licensed establishments.
Since the bureau began tracking the data, total cannabis tax revenue increased 15.7%. That's in spite of a sizable drop in fiscal year 2023 total revenue, which the agency largely attributed to California.
Prior to fiscal year 2023, California levied both a 15% retail excise tax and a cultivation tax. But on July 1, 2022, the state eliminated the cultivation tax to ease the tax burden, lower market prices and curb the black market. As a result, California’s cannabis tax revenues fell from $878.56 million in 2022 to $528.23 million in 2023.
"California showcased the difficulty of changing tax structures," wrote Robert Simon, a statistician at the U.S. Census Bureau. "When implementing cannabis taxes, states aim to generate revenue without driving prices so high that consumers turn to illegal markets. That’s why they experiment with various tax structures, including excise taxes on cannabis wholesale, cultivation and retail."
