States reap windfall as pot sales soar

Marijuana sales have jumped substantially over the past year in parts of the country where recreational pot is legal, giving a boost to states that have come to depend on tax revenue to bolster their pandemic-battered coffers.

The majority of states that allow recreational marijuana reported either record sales or record-high tax collections in the past 12 months, signs of both a maturing industry that is attracting new customers and consumers who had little else to do during coronavirus lockdowns.

Each state with a legal marijuana regime collects and reports revenue data differently. The Hill’s analysis of data from four of those states show a brief slump in sales in the weeks after initial lockdown orders in May and April, but a surge after that.


In Colorado, monthly sales of recreational and medical marijuana jumped to a record $226 million in July, the most the state has recorded since voters approved recreational sales in a 2012 ballot measure.

Throughout 2019, demand in Colorado averaged $145 million a month. In 2020, that number jumped to $182 million and to $202 million in the last six months of the year.

Washington state reports the amount of excise tax revenue it collects each month, rather than total sales. Evergreen State residents who approved recreational pot at the same time as Colorado paid $454 million in excise taxes in 2020, up more than $40 million the previous year.

In April, May and June, tax collections surged above $40 million a month for the first time.

California, which also reports excise tax revenue but on a quarterly basis, began generating more than $100 million in revenue every three months over the past year. Though a drop in the bucket in a state where the annual budget now tops $200 billion, the $500 million Californians spent on marijuana excise tax in 2020 was up by two-thirds over 2019 tax collections.


The most substantial growth came in Michigan, where voters approved legalized marijuana in a 2018 ballot initiative.

There, the market shows the clearest signs of consumer adoption of a new commodity. Recreational sales averaged about $23 million a month in 2019, followed by a whopping $82 million a month last year. In five of the last six months of 2020, Michigan retailers sold more than $100 million in pot products.

Legal marijuana industry analysts expect substantial growth in the coming years, both in states where pot is already legal and in states that are poised to implement new regimes, like Connecticut, New Jersey, New York and Vermont.

Sales of all cannabis products rose 67 percent in 2020, according to Flowhub, a cannabis retail management platform. Pot businesses brought in more than $18 billion in revenue in 2020, according to Leafly, a Seattle-based industry analyst firm. The industry is worth a collective $61 billion, a figure that is likely to explode in the coming years.

Nine states more than doubled their sales in the last year, according to Leafly, including conservative states like Arkansas, Florida, North Dakota and Ohio.