Aaron Larson (J.D. 2025, Ohio State), Marijuana Tax Revenues and Distributions in Recreationally Legal States:

An area of the law often forgotten regarding marijuana legalization is the tax and revenue portion of the statutory or constitutional legalization. Each state that has legalized recreational use marijuana generates profit for their state. How much profit are these states making? More importantly, how are the tax revenues being distributed? Many Americans' wonder where their tax money goes. For marijuana revenues, the majority of states divide their tax revenues through a required statutory scheme. While if may be tough to find out where your income tax is divided, marijuana tax revenues are much easier to see, legally.

Conclusion
Very few questions remain regarding tax revenues as each of the twenty-nine states yet to legalize start to turn the dial. The majority of the states, while all unique, distribute their tax revenues to similar programs and departments within the state. Similarly, Alaska is the only state with a vastly different taxing scale. Each of the other twenty adult use states is within a similar realm of the percentage they tax marijuana at.

The big questions will be when the federal government decides to end its prohibition on marijuana entirely. What will a federal tax on cannabis look like? What will federal tax distributions be? Will the distribution percentages be as readily available as they are from legalized states? Will state distribution programs be regulated heavily by the federal government, or will they be left alone? Will the federal government implement a taxing scale that states must adhere to?

All of these questions, and more, revolve around legalization by the federal government. This is not simply unique to tax revenues and sales in general, though. Many cannabis related problems have been solved by the states who have legalized adult recreational use. When the federal government decides to legalize, we will see if all of these problems come back as the federal government attempts to regulate, or if there will be more deference to state governments, especially those which have had almost a decade long program.

One final question that needs to be evaluated further is how a state compares pre- and post-legalization. While there is obviously a large incentive in legalizing based on economic reasons, is there big enough of an impact through sales and tax revenues that a state is much better off post-legalization? Or, are non-legalized states similarly situated?