The majority of states that have legalized recreational marijuana collect more tax revenue from pot sales than alcohol sales.

The first two states to legalize pot benefit the most, Colorado and Washington. Nationwide, total weed tax revenue was nearly $3 billion, according to a report on “sin taxes” by the Institute for Taxation and Economic Policy (ITEP).

So far, 11 states have legalized the sale of recreational marijuana.

States that have given the green light to legalizing recreational marijuana include Colorado, Washington, California, Illinois, Michigan, Massachusetts, Oregon, Arizona, Nevada, Maine and Alaska.

All but four of the states above collected more excise tax revenue from weed sales than from alcohol.

Other items subject to what is known as a “sin tax” are tobacco products and alcohol sales.

One of the exceptions is Alaska, which is attributed to the fact that the last frontier “has a higher alcohol tax rate than most states (15 cents per drink of alcohol, for example)”, according to the ITEP report.

The other three outliers are Maine, Michigan, and Oregon, as these three states are referred to as “control states”, since each of the said state governments operates fairly profitable state-run liquor stores, according to the ITEP report.

Tobacco products continue to generate significantly more revenue for state governments for most of the 11 states except two.

The report highlights that cannabis sales tax revenues in the state of Colorado and Washington exceed those of alcohol and tobacco. They are the first two states to legalize (and tax) recreational marijuana sales.

That said, with cannabis use becoming less stigmatized and more popularized and since tobacco use is declining, state tax revenue from tobacco is slowly declining, the report says.

The state of California, which has the fastest growing legal weed industry, “generated $832 million in excise taxes, about twice as much as alcohol sales,” said reported The Hill.

As a collective, the 11 states that have legalized the recreational use and sale of weed “received just under $3 billion in pot excise taxes in 2021, up from $2.5 billion they earned on liquor excise taxes or liquor store profits,” per the Hill report.

The results do not ring true in every case, state by state, but rather the figure represents the sum of the sin tax collections of the 11 states involved.

The reason could have something to do with the fact that the tax rate on marijuana is much higher than alcohol in these states.

For example, in Massachusetts, the state levies a 10.25% excise tax on marijuana products. This comes “in addition to local option tax of up to 3% and 6.25% state sales tax,” according to MassLive.

On the other hand, alcohol rates are based on the amount of liquid weight purchased.

The December 2021 Commonwealth of Massachusetts Revenue Monthly Report of Collections and Refunds reported more than $74 million in revenue from marijuana excise taxes for fiscal year 2022, compared to about $51 million from sales. of alcohol.