More than a decade into America’s state-by-state experiment with cannabis legalization, the results are no longer theoretical. Government data now confirms what early advocates envisioned—and what critics warned against: legal cannabis is reshaping public policy. The numbers tell a clear story, one grounded in billions in state tax revenue and a measurable decline in teen marijuana use.
According to two reports from the Marijuana Policy Project (MPP), legal adult-use cannabis sales have generated more than $24.7 billion in state tax revenue since 2014. Much of that money is being directed toward education, healthcare, infrastructure, substance use prevention and community reinvestment. At the same time, teen cannabis use has declined in most legal states, defying long-held fears that legalization would increase youth access and consumption.
“Legalization does not increase youth cannabis use. In fact, evidence suggests the opposite,” MPP’s youth impact report states.
Tracking The $24.7 Billion Impact Of Cannabis Taxation
Adult-use cannabis sales began in Colorado and Washington in 2014. Since then, tax revenue has grown steadily across more than 20 states that now regulate cannabis for adult use.
In 2024 alone, states brought in over $4.4 billion, a record-setting year. And by March 2025, total cannabis tax collections reached $24.7 billion, according to MPP.
The five top-earning states to date (through 2024) are:
- California: $6.72 billion
- Washington: $4.62 billion
- Colorado: $2.62 billion
- Illinois: $2.42 billion
- Michigan: $1.62 billion
Other states surpassing the billion-dollar mark include Nevada ($1.26 billion), Massachusetts ($1.2 billion) and Oregon ($1.13 billion), showing that tax impacts are not limited to early adopters or coastal markets.
These figures reflect state-level adult-use cannabis excise and sales taxes only. They exclude medical cannabis revenue, licensing fees, federal taxes and local municipal taxes, which, in some cases, add tens of millions more (e.g., Denver alone collected an estimated $39.6 million in 2024).
Where The Cannabis Tax Money Goes: Public Services And Equity
Legal cannabis is not just raising revenue; it’s funding public priorities in nearly every state that regulates adult-use sales. While each state allocates funds differently, MPP’s 2025 report outlines how cannabis taxes are being used to support everything from K–12 education and infrastructure to mental health, housing and equity initiatives.
Here are examples of how legalization states are putting cannabis tax dollars to work:
- California has directed significant cannabis revenue to childcare, environmental programs, and community reinvestment. In both 2023 and 2024, more than “$50 million was awarded to community reinvestment grants” each year.
- Colorado has allocated more than $934 million to its public school system since legalization. In 2024, the state collected $237.4 million in cannabis taxes, which was “more than four times the amount of alcohol taxes it collected in 2023.”
- Illinois law directs 25% of adult-use cannabis tax revenue to the Recover, Reinvest, and Renew (R3) Program, which funds local organizations in communities harmed by cannabis criminalization. Since legal sales began, more than $380 million has been distributed to this fund.
- Michigan allocates 35% each to the School Aid Fund and Transportation Fund, and 15% each to municipalities and counties hosting cannabis businesses. In fiscal year 2024, over $116 million went to each of the two state funds, and $99.4 million was distributed locally.
- Nevada directs “its entire 10% state retail excise tax to the State Education Fund.” In FY 2024, cannabis taxes provided $107.8 million to support K–12 education.
- Massachusetts uses cannabis revenue for “youth programs, public awareness campaigns, and a recently introduced Social Equity Trust Fund,” which has distributed $26 million to businesses across the state.
- Arizona earmarks its revenue with precision: 33% to community colleges, 31.6% to law enforcement and fire departments, 25.4% to transportation and 10% to public health and criminal justice programs.
- Alaska dedicates 50% of cannabis excise taxes to a Recidivism Reduction Fund, supporting reentry services. Another 25% supports the Marijuana Education and Treatment Fund.
- New York divides its revenue 40% to education, 40% to community reinvestment and 20% to drug treatment and education programs.
- Maryland allocates 35% of its cannabis tax revenue to a Community Reinvestment and Repair Fund, with additional shares going to business assistance, county governments and public health funds.
- Vermont directs cannabis taxes to support afterschool and summer programs, especially in underserved areas.
From social equity to school funding, these examples illustrate how legalization is shaping proactive fiscal policy across the country.
Teen Cannabis Use Has Declined In Most Legal States
Despite early fears that legalization would increase teen marijuana use, the opposite trend is taking shape. According to the Marijuana Policy Project report, which compiles data from federal and state agencies, “in 19 of the 21 states with before-and-after data, government surveys indicate a decrease in high schoolers’ marijuana use rates post-legalization”.
The national data reinforces that trend. Between 2011 and 2024, past-month marijuana use dropped significantly across all three grade levels surveyed by the CDC and Monitoring the Future:
- 8th grade: from 7.2% to 4.3% (down 40%)
- 10th grade: from 17.6% to 9.5% (down 46%)
- 12th grade: from 22.6% to 16.2% (down 28%)
Access to marijuana has also declined. Among 10th graders, the share who said cannabis was “fairly easy” or “very easy” to obtain dropped from 68.4% in 2011 to 41.2% in 2024.
“Since states began legalizing cannabis for adults in 2012, MTF data shows 28% to 46% drops in past 30-day marijuana use in the three grades it surveyed,” the report notes, “along with significant drops in the percent of youths reporting ‘very easy’ or ‘fairly easy’ access to marijuana”.
State-level data offers a more granular view:
- Colorado: High school past-month use dropped from 22% in 2011 to 12.8% in 2023
- Washington (10th grade): from 20.0% in 2010 to 8.4% in 2023
- California (9th grade): from 12% in 2013–2015 to 6% in 2019–2021
- Arizona (10th grade): from 17.0% in 2018 to 7.8% in 2024
- New York: from 17.9% in 2019 to 12.0% in 2023, excluding NYC data
The declines may reflect a shift in who controls access. As the report explains:
“On the illegal market, no one is checking IDs before selling marijuana. When and where cannabis is illegal, high schoolers often sell cannabis to their peers”.
In contrast, licensed stores “have overwhelming compliance with age-gating,” helping restrict underage access. The report also notes that cannabis taxes are often directed toward “education and prevention, such as after-school activities,” reinforcing efforts to reduce youth use.
The National Picture Is Sharpening
As more states legalize and regulate cannabis for adults, the long-term data is becoming harder to ignore. The feared surge in youth use has not materialized. State tax revenues continue to grow. And cannabis dollars are funding public goods, from education to infrastructure to social equity programs.
These aren’t projections. They’re drawn from “tax department reports, federal surveys, and health agency data.” They reveal a steady trend: when states shift cannabis from the illicit market to a regulated one, the result is not chaos: it’s policy alignment.
What began as a bold experiment in Colorado and Washington is now a nationwide case study in how regulation can advance public health and fiscal stability. For lawmakers still debating reform, the numbers offer fewer reasons to delay and more reasons to design legalization thoughtfully, with guardrails and goals.
Read the full article here