“Higher taxes do not eliminate consumer demand. They simply change where consumers buy their cannabis.”
By Rodney Holcombe, LeafLink
In recent piece, The New York Times editorial board called for a federal tax on cannabis and urged states to raise their own taxes to “dollars per joint, not cents.” That argument assumes cannabis is lightly taxed today—but across the country, the opposite is true.
Taxes on legal cannabis are higher than almost every industry in the United States and have generated nearly $25 billion since adult-use sales commenced in 2014. Despite these rates, efforts to increase cannabis levies are continuing to gain steam.
In 2025 alone, Maryland, Minnesota, Maine, Ohio, Michigan and California attempted to raise or expand cannabis taxes. This year, Colorado and Oklahoma are looking to do the same. Many of those proposals emerged as lawmakers confronted budget shortfalls and the expiration of federal pandemic aid. Cannabis has increasingly been treated as an untapped source of revenue.
In several large markets, cannabis taxes are layered on top of one another. Excise taxes are combined with state sales taxes, wholesale taxes, local taxes and, in some cases, potency-based taxes. In states such as Illinois, Michigan and Washington, the effective
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