The federal government still deems marijuana illegal.
But 16 states and the District of Columbia have fully legalized it in their jurisdictions.
Cultural movements certainly helped marijuana gain its state-level legal status, but what do these states get in return? Quite a lot of tax money, as it turns out.
But as more states look to legalize weed for recreational use, questions arise on the impact such laws have on the economy, crime, marijuana use, road safety, and other health concerns.
Let’s start with a few interesting key stats:
- California’s state tax revenue from adult-use recreational marijuana sales in 2020 was $1,031,879,926
- Washington’s state tax revenue from adult-use recreational marijuana sales in 2020 was $473,931,351
- An RCG Economics and Marijuana Policy Group 2016 study on Nevada estimates legalizing recreational marijuana in the state could support over 41,000 jobs till 2024 and generate over $1.7 billion in labor income
- New Frontier’s 2018 report on the potential impact of federally legal marijuana suggests that nationwide legalization could generate 1 million jobs by 2025
- Legal cannabis supported 243,700 full-time American jobs in early 2020
- The legalization of recreational marijuana in Oregon led to an increase in property crime, burglary, vehicle theft, and violent crime compared to non-legalized states
- The fraction of fatal accidents in which at least one driver tested positive for THC has increased nationwide by an average of 10% from 2013 to 2016
- Legalization was associated with a 10.8% drop in suicide rates for men aged 20-39
As states and localities continue to pass legalization and decriminalization reforms. Leading to the anti-cannabis residents of such states find themselves asking what this will mean for them and their communities. Hopefully, these stats will help answer some of those questions, and if nothing else point you in the right direction with your research.
Note from the author: Please don’t confuse any of the content in this article as an endorsement of legalizing marijuana, or lack there of. These are merely aggregated statistics from a neutral point of view to help you better understand the effects legalizing marijuana has shown to have on a state.
What does legalizing marijuana do for a states tax revenue?
1. Colorado’s state tax revenue from adult-use recreational marijuana sales in 2020 was $387,480,110
(Source: Colorado Department of Revenue)
This dollar amount excludes local sales taxes. With a current population of 5.8 million, Colorado pulled in almost $67 per resident in revenue by taxing recreational marijuana purchases. Colorado was the first state to legalize weed, and they’ve been collecting tax revenue from adult-use sales since 2014, that year they collected $67,594,323.
2. Washington’s state tax revenue from adult-use recreational marijuana sales in 2020 was $473,931,351
(Source: WSLCB Annual Report)
Washington voters approved legalizing weed in their state around the same time as Colorado. Their first stores opened about 6 months after those of Colorado’s in July of 2014. That first year they earned $22,399,058 in 6 months.
A far cry from today’s earnings. In 2020 Washington earned almost double that figure on a monthly basis ($39.4 million). That number does not include local taxes, which totaled an estimated $156.4 million from July 2014 through September 2020.
3. Oregon’s state tax revenue from adult-use recreational marijuana sales in 2020 was $158,336,274
(Source: State of Oregon – Government & Researchers)
Oregon’s first store adult-use marijuana store opened up in October 2016. The next year, 2017, they collected $68,646,246 in taxes. Just 3 years later that figure is over $150 million ($37 per resident), excluding local taxes collected, which totaled roughly $67.1 million over the past four years.
4. Alaska’s state tax revenue from adult-use recreational marijuana sales in 2020 was $24,540,009
Alaska earned nearly $35 per resident from its 2020 taxation of recreational weed-related sales. The state, whose voters first approved a marijuana initiative back in 2014, had opened for business end of 2016. They had a bit of a slow start at first.
But its medical marijuana program didn’t have dispensaries, thus once recreational was approved there wasn’t a proper foundation in place for cultivation and retail. They eventually ironed out the details and have seen rising tax revenue ever since. The above figures do not include additional tax certain localities charge.
5. Nevada’s state tax revenue from adult-use recreational marijuana sales in 2020 was $123,683,509
(Source: State of Nevada Department of Taxation)
Nevada earned a staggering near $40 per resident by taxing recreational weed-related sales. The above figures do not include additional tax some localities impose. Nevada voters voted in favor of the legislation in 2016. They made almost $87 million dollars in their first full year of sale taxation.
6. California’s state tax revenue from adult-use recreational marijuana sales in 2020 was $1,031,879,926
(Source: California Department of Tax & Fee Administration)
California dreamin’, on such a winter’s day, indeed. By declaring marijuana stores as essential businesses, California raked in a record $1.03 billion (a little over $26 per resident) in recreational weed-related taxes during a pandemic year.
That figure does not include local sales and special taxes either. A number that is sure to raise eyebrows among the states considering putting marijuana legalization legislation to the polls.
7. Massachusetts’ state tax revenue from adult-use recreational marijuana sales in 2020 was $118,455,230
(Source: Massachusetts Department of Revenue)
I’m gonna be honest, I didn’t even know weed was legal in Massachusetts. Considering the voters approved the legislation back in 2016 and sales have been taking place since the summer of 2018, I feel a little behind on things.
Their government collected over $75 million in taxes in 2019 and saw a 56% increase in 2020. Ending the 2020 year with over $118 million in taxes from legal weed-related sales. Not including an additional 3% in sales tax the State allows its cities and towns to impose.
8. Michigan’s state tax revenue from adult-use recreational marijuana sales in 2020 was $81,705,350
(Source: Michigan.gov – Marijuana Regulatory Agency)
Despite Detroit opting in as late as November 24, 2020, Michigan state pulled in over $81 million from it’s adult-use marijuana sales tax. This figure seems poised to increase as more localities in Michigan opt-in and establish regulations. Something they’ve been relatively slow in doing thus far.
9. Illinois’ state tax revenue from adult-use recreational marijuana sales in 2020 was $174,884,334
(Source: Illinois State Department of Revenue)
Illinois earned the equivalent of $60 per resident in tax revenue from recreational marijuana-related sales. In fact, 2020 was its first year in business, as the bill was signed into law on June 25, 2019. The state has already reported over $30 million in tax revenue in January 2021. Setting it on track to significantly beat the $170 million number should it average anywhere near $30 million per month.
10. Maine’s state tax revenue from adult-use recreational marijuana sales in January 2021 was $247,068
(Source: State of Maine – Office of Marijuana Policy)
Another newcomer to the business of legal weed sales is Maine. Only when it comes to actual operations, however. Because it’s voters approved an initiative to legalize recreational marijuana back in November of 2016. Sales began in early October of 2020, and the state received $427,853 in tax revenue from Q4 of the same year.
How does legalizing marijuana impact the economy?
11. A study on Nevada estimates legalizing recreational marijuana could support over 41,000 jobs till 2024 and generate over $1.7 billion in labor income for the state
(Source: RCG Economics)
Interestingly enough, this 2016 study by the RCG Economics and Marijuana Policy Group had Nevada annual marijuana sales at around $485 million by 2024. Yet in its 2020 fiscal year, Nevada reported almost $685 million in taxable sales. With almost half of the fiscal year taking place during the COVID pandemic and a suffering tourism industry.
12. A 2016 ICF study estimates at least 81,000 additional direct, indirect, and induced jobs in California as a result of legalized marijuana sales. It also projects an increase in total labor income by at least $3.5 billion
(Sources: ICF – Insights)
California was the first state to legalize marijuana for medical purposes, back in 1996. They voted to legalize recreational marijuana in 2016. The study did not consider the associated costs with marijuana use, such as increased energy usage, mental and physical health impacts. Also public education campaigns, changes in employee productivity, or increased security requirements.
13. New Frontier’s 2018 report on the potential impact of federally legal marijuana suggests that nationwide legalization could generate 1 million jobs by 2025
(Source: New Frontier Data)
The report also predicts a possible $106 billion in taxes generated. As far as the jobs go, they forecast them coming from the task associated with the marijuana industry as a whole, spreading across the nation.
Such as farmers to grow the plant, someone to process it, someone to distribute it, retail sales, and so on. Additionally, the report leaves room for jobs outside of direct production and distribution. Jobs like software development, lending services, construction companies, etc.
14. Should marijuana become legal on the national level, marijuana companies would be free to list their stocks on all U.S. exchanges, thereby enhancing liquidity and opening up access to many more investors
Marijuana stocks are already very popular among the internet investment community. But with marijuana legalization gaining popularity with states across the US. Stocks of companies positioning themselves for this booming industry are starting to emerge as potential growth investment opportunities.
At present, many of the more successful cannabis companies are based out of Canada and other countries, but should the U.S. legalize it on a national level, liquidity would shoot up and if the current appetite is a good judge, the volume would not be lacking.
15. Legal cannabis supported 243,700 full-time American jobs in early 2020
Leafly’s annual Cannabis Jobs Report states that even in what was considered a down year, (no, not 2020, in this case, it’s 2019), the marijuana industry added 33,700 full-time-equivalent jobs. It will be interesting to see the numbers for 2020, as many marijuana stores were deemed essential and stayed open.
But overall, as of January 2020, the legal weed industry employed roughly 243,700 people full-time, recording a 15% year-over-year increase. California, Colorado, and Washington were the top three employers.
What is marijuana legalization’s effect on crime?
16. The legalization of recreational marijuana in Oregon led to an increase in property crime, burglary, vehicle theft, and violent crime compared to non-legalized states
(Source: ScienceDirect – Journal of Criminal Justice)
Relative to the non-legalized states, Oregon saw an increase of 365 property crime cases, an increase of:
- 103 burglary cases,
- 56 motor vehicle theft cases,
- 49 cases of violent crime,
- 39 cases of aggravated assault,
- and 205 larceny cases.
All figures are per 100,000 population. This particular study’s findings suggest the overall crime rate has risen post-legalization of recreational marijuana in Oregon.
17. States on the US-Mexico border that legalized medical marijuana saw a 5.6% to 12.5% decrease in violent crimes
(Source: The Economic Journal)
This study found the reduction of crime post-legalization to be the highest in counties closest (less than 220 miles away) to the U.S. border with Mexico. They use their finding to say that there may be credence to the theory which says that decriminalization of the production and distribution of weed leads to a drop in violent crime in areas having ties to Mexican drug trafficking cartels.
18. Legalization of medical marijuana shows no increase in overall crime
(Source: Science Direct – Journal of Economic Behavior & Organization)
More than half of the United States has approved comprehensive, publicly available, marijuana programs. This study tested what impact the legalization of medical marijuana had on crime and found no causal effect on violent property crime nationwide.
Likewise, the legalization did nothing for the reduction of crime either. With the exception of California, where both violent and property crime dropped by 20% post-legalization of medical marijuana.
19. Homicide rates increased in many of the cities in which recreational marijuana is legal
(Source: The Hill)
Proponents of making recreational marijuana legal have long argued that legalizing weed would eliminate a lot of the crime and violence that is associated with its sale while classified as illegal. But were they right? If one is to judge by the change in crime in the larger pro-marijuana jurisdictions, it doesn’t look like it, on the surface at least.
The homicide rate in Denver, CO has steadily risen from 2013 to 2018. Seattle, WA’s homicide rate increased every year except in 2016. D.C. saw a resurgence of violence post-legalization in 2019. What’s the driving factor?
One of them appears to be price, legal weed at dispensaries is just much too expensive when compared to an illicit dealer. Thus, the illicit black market is not eliminated and competition among dealers looking to increase their market share may actually grow.
20. FBI data show that crime clearance rates increased for violent and property crimes in two states
(Source: Sage Journals)
This study’s findings suggest the total number of crimes solved in Washington and Colorado between 2010-2015, as it related to the total number of crimes reported by the police, increased as a result of recreational marijuana legalization and the police devoting their efforts elsewhere. The cops spend less time on marijuana arrests and more time on violent and property crimes. Prior to legalization, the clearance rates trend in both states was declining, meaning it was getting worse.
Does legalization increase marijuana use?
21. Respondents aged 12 to 17 years reporting cannabis use disorder increased from 2.18% to 2.72%
(Source: JAMA Psychiatry Study)
Though seemingly a minuscule of an increment, this was a 25% higher increase (from 2008 to 2016) than those belonging to the same age group in the states that did not legalize recreational marijuana. The study had over 500,000 respondents. The states where recreational marijuana was illegal were used as the control group.
22. Respondents 26 years or older reporting frequent marijuana use increased from 2.13% to 2.62%
(Source: JAMA Psychiatry Study)
The same study showed an increase in frequent marijuana usage post the legalization of recreational weed, among those 26 years of age and older. This age group’s overall past month marijuana use increased from 5.65% to 7.10% post-legalization. These numbers include those who smoked it at least once in the past month, versus the 2.62% which focuses on frequent use.
23. Respondents 26 years or older reporting cannabis use disorder increased from 0.90% to 1.2
(Source: JAMA Psychiatry Study)
The same 26 years and over demographic saw an increase in their past-year cannabis use disorder, going from .90% to 1.2%. This study’s strength is its large, nationally representative sample size. Spanning multiple years and covering major age groups, whilst deploying a survey design that produces more accurate state-level estimates.
24. Respondents aged 18 to 25 years, reported no difference in past-month marijuana use, past-month frequent use, or past-year cannabis use disorder
(Source: JAMA Psychiatry Study)
Continuing with the same study from JAMA Psychiatry, interestingly enough there was no noticeable overall difference in marijuana use or disorders in those aged 18 to 25 years. The study hints at the legal age being 21 as one of the factors to partly explain the flatness. They associate availability with an increase in use, as is the case for those aged 26 years and older.
25. Decrease of 8% in odds of marijuana use and decrease of 9% in odds of frequent marijuana use
(Source: JAMA Pediatrics)
This study pooled biennial Youth Risk Behavior Surveys (YRBS) from 1993 to 2017, which are issued to high school students grades 9 through 12 to track behavioral trends such as unhealthy eating, sexual activity, and substance use. They concluded that recreational marijuana legalization could be associated with an 8% drop in the odds of marijuana use and a 9% drop in the odds of frequent use.
26. Usage in states where marijuana is legal tends to be higher than usage in the U.S. overall, but this difference mainly pre‐dates legalization
(Source: CATO Institute)
According to the National Survey on Drug Use and Health between 2002–2014, the use of marijuana in states that legalized recreation weed is higher than the average use of marijuana in the United States overall. However, even before legalization, this held true, the only exception being Illinois. Which was slightly below the national average, but every other state that legalized weed was almost 4% higher on average than the national rate even before legalization.
Does making weed legal impact road safety?
27. The fraction of fatal accidents in which at least one driver tested positive for THC has increased nationwide by an average of 10% from 2013 to 2016
(Source: Wiley – Economic Inquiry)
Identifying a causal effect is certainly difficult, there are numerous confounding factors at play in fatal accidents. However, between 2013 and 2016 in Colorado and Washington, the increase in fatal accidents in which at least one driver had THC in their system were 92% and 28% respectively.
28. From 2007 to 2015, the presence of any alcohol in a driver’s system declined from 12.4 percent to 8.3 percent, but the presence of marijuana rose from 8.6 percent to 12.6 percent.
(Source: American Bar Association)
In the latest survey in 2015, slightly more than 1-in-5 drivers had the presence of any non-alcohol drug in their systems. Though one must not immediately draw a direct link between the presence of drugs in one’s system and driving impairment, these statistics do point out the growing amount of drivers on our freeways with some type of drug in their system.
29. In Colorado, 40 percent of recreational users and 34 percent of medical marijuana users believed that marijuana had no impact of their ability to drive.
(Source: Colorado Department of Transportation)
Back in 2018, almost 70% of Colorado drivers who consume marijuana reported driving high at least once in the past year. Almost one-third of them admitted driving high nearly every day. About 10% of all marijuana users (recreational and medical), believe driving high actually makes them a better driver. The survey also found that 35% of the non-users reported being passengers of a driver under the influence of marijuana.
What is marijuana legalization’s effect on health and suicide numbers?
30. Legalization was associated with a 10.8% drop in suicide rates for men aged 20-39
(Source: American Public Health Association)
State-level suicide data from 1990-2007 was used in this study to examine the possible link between medical marijuana legalization and suicide rates per 100,000 people. The results showed that legalizing medical marijuana helped decrease the suicide rates among men by over 10%, compared to those states that did not legalize. This study seems to support the theory that marijuana can be used to cope with stress in life. Suicides are the 10th leading cause of death in the U.S.
31. Cannabis-associated emergency department visits increased annually by 7%
(Source: PubMed- Journal of Addiction Medicine)
This study looked at cannabis-related emergency room visits for those over 12 years of age, during the 2006 to 2014 time period. Those between the ages of 12 and 17 had the highest visitation rate. Uninsured patients were 40% more likely to visit the ER, versus privately insured patients.
32. Legalization of recreational marijuana was associated with decreased binge drinking in college students age 21 and older
(Source: ScienceDirect – Addictive Behaviors)
Do college students prefer to smoke weed or get drunk? Or do they prefer both? This biannual survey administered from 2008 to 2018 across four-year colleges and universities says they prefer the weed. It concluded that the legalization of recreational marijuana led to a decrease in binge drinking among college students aged 21 and older.
33. States with medical cannabis laws had a 24.8% lower mean annual opioid overdose mortality rate
(Source: PubMed – JAMA Internal Medicine)
Can marijuana help fight a rapidly rising problem in the United States, opioid overdoses? Which seems to be driven by an increase in prescriptions for chronic pain. Something marijuana can help with. According to this study, the states which allowed the use of medical marijuana had a 24.8% lower mean annual opioid overdose mortality rate versus the states without medical cannabis laws.
Note on the numbers used in the article: In an effort to paint a fuller picture, the figures in this article were aggregated from numerous credible sources, who reported the results of their surveys at various points in time.
Please keep in mind the sensitive nature of this topic as you research it further. As tends to be the case for such arguments, each side presents their own studies that show favor to their positions. Do you live in a state that is about to legalize recreational weed? Hopefully, these weed legalization statistics will give you a better idea of what’s to come and sparked your interest to learn more.
Colorado Department of Revenue | WSLCB Annual Report | State of Oregon – Government & Researchers | MPP | State of Nevada Department of Taxation | California Department of Tax & Fee Administration | Massachusetts Department of Revenue | Michigan.gov – Marijuana Regulatory Agency | Illinois State Department of Revenue | State of Maine – Office of Marijuana Policy | RCG Economics | ICF – Insights | New Frontier Data | Investopedia | Leafy | ScienceDirect – Journal of Criminal Justice | The Economic Journal | Science Direct – Journal of Economic Behavior & Organization | The Hill | Sage Journals | JAMA Psychiatry Study | JAMA Pediatrics | CATO Institute | Wiley – Economic Inquiry | American Bar Association | Colorado Department of Transportation | American Public Health Association | PubMed- Journal of Addiction Medicine | ScienceDirect – Addictive Behaviors | PubMed – JAMA Internal Medicine