image image Select Your State
image Account Get MMJ Card

Taxes Differences — Medical Vs Recreational Cannabis.

Author avatar

Dr Weedy Team

Chromometer 9 min
4.7
(7)

The legalization of adult pot is on the march nowadays. By January 2022, there are 18 states that have decriminalized and allowed the recreational use of marijuana, with minimum restraints, such as age, THC content, purchase limits, etc. Add here DC and Guam, and the trends become obvious — it seems that we’ll have the question of total cannabis legalization covered within the nearest years.

It results in another tendency — people, even those who have the medical cannabis patient status, do not want to bother and apply for a MMIC (medical marijuana identification card). Yet, the latter has lots of advantages, and in this article we’d like to tell you how you can benefit from possessing the MMIC.

Along with higher limits to buy, possess, and grow weed, stronger cannabinoid content, wider geography of states where the medical weed is allowed, there are some pragmatic reasons to get your MMIC. The price is the same, but the taxes for the adult-use cannabis are much higher. Each state has its own regulations, they levy taxes on everything you buy or sell. Weed is not an exemption.

What Kinds Of Taxes We Pay

There is no common tax regulation on the federal level for marijuana, neither medical or recreational. The reason is that the federal government and legislators are yet to adopt the necessary laws to allow and regulate cannabis throughout the US. Thus, the states, municipalities, and counties are the ones to apply their own weed taxes within their jurisdictions. Still, all of them use similar cannabis taxation system, which includes:

  • This is the kind of tax that is levied on a special group of goods, usually associated with the adult use, health or environment hazard. The examples are alcohol, tobacco, gasoline, and cannabis. If you see the words “sin taxes” — this is about the excises. Usually, this tax is paid by the seller or manufacturer, but when it comes to weed, a buyer pays the levy;
  • sales levies. This one is always paid, whenever you purchase some goods or services, including marijuana products;
  • local taxes — are applied by local authorities in their sole decision. Municipalities and states use these taxes to support local projects. Only a few states allow their local authorities to impose their own taxes on the marijuana purchases.

In general terms, this system is implemented in all states and for all “sin” goods and services. However, when talking about medical cannabis, there are some exceptions.

The Most Forgiving and Most Expensive States

Medical cannabis is a taxable asset, just like anything else we buy in a store or online. Yet, for MMIC patients the levies can be significantly more liberal than those for recreational pot users. It varies from state to state, which means that your marijuana bills depend on your residency:

  • Alaska, Washington, Louisiana, Minnesota, Utah, Delaware, Vermont, Pennsylvania, Maryland, New Hampshire, Maryland, Oregon, Massachusetts — the residents of these states are the happiest as they do not impose any statewide levies or excise taxes on medical weed. Yet, the municipalities in Alaska, Massachusetts, and Oregon may impose their local taxes;
  • Hawaii, Colorado, Illinois, Missouri, Montana, New Jersey, and North Dakota are the states where the total marijuana levies do not exceed 5%;
  • Arizona, Arkansas, California, Nevada, Connecticut, Florida, Iowa, Maine, Michigan, New York, Ohio, Oklahoma, Rhode Island, Washington, D.C. impose excise, local, and sales taxes that in sum range between 5% – 7% and higher.

Colorado and some other states, again, entitle their counties and towns to levy local taxes. For these details, you should address a local tax man.

Medical vs Recreational Taxes

As you can see, most states that have legalized medical weed, tend to implement liberal taxation policy with regard to medical cannabis purchases. Some of them have also decriminalized and allowed the adult use of pot. However, the taxes imposed for the latter are quite different. While the majority of MMIC patients have to pay either only sales tax or no tax at all, those who like to smoke weed without the doctor’s prescription will have to pay 15% of the excise levy and more, along with the higher sales and local taxes.

Depending on the state, the tax difference between medical and recreational cannabis purchases can be as much as 0% – 20% respectively, like in Oregon. Marijuana users in the Golden State are not free from taxes whether they have the medical weed card or not, however, the levies still vary from 15% for the MMJ patients to 38% for the adult users.

Comparison Tax Chart

 

State

Taxes And Levies For MMJ

Taxes And Levies For Adult Weed

Alaska

Exempted, in some counties insignificant local levies may be imposed

Excise = varies from 3 to 5% in some localities

Sales tax = 0

Local taxes = 0

Delaware

Exempted

Recreational use of marijuana is not allowed in Delaware, yet the bill that legalizes pot has been released recently

Louisiana

Exempted

Recreational use of marijuana is not allowed in LA, you can be fined for possession of more than 14 grams

Maryland

Exempted

Recreational use of marijuana is not allowed in MD, yet the legislators are working on legalizing it this year

Massachusetts

Exempted in most municipalities

Excise = 10.75%

Sales tax = 7.25%

Local taxes = 3%

Minnesota

Exempted

Recreational use of marijuana is not allowed in MN

New Hampshire

Exempted

Recreational use of marijuana is not allowed in NH, the fines may be applied

New Jersey

soon will be 0

 

Excise = from 10 to 60 USD for an ounce

Sales tax = over 6%

Local taxes = 0

Oregon

Exempted in most municipalities

Excise = 17%

Local taxes = 3%

Pennsylvania

Exempted

Recreational use of weed is yet to be decriminalized in PA

Utah

Exempted

Recreational marijuana is illegal in UT

Vermont

Exempted

Excise = 14%

Sales tax = 6%

Washington

Exempted

Excise = 37%

 

West Virginia

No taxes for buyers, but a seller can be taxed up to 10%, which influences the prices

Illegal

Illinois

Statewide 1% sales tax

Up to 16.25% tax rate

Colorado

Statewide 2.9% sales tax

Maximum 30% levies

Hawaii and Missouri

4% max

Adult-use weed is illegal in these states

Montana

Excise = 4%

Sales tax = 0

Local taxes = 3% maximum in some localities

Excise = 20%

Sales tax = 0

Local taxes = 3%

South Dakota

Excise = 0

Sales tax = 4.5%

Local taxes = 1-2% of the municipal tax

Excise = 15%

Sales tax = 4.5%

Local taxes = 1-2%

North Dakota

Sales tax = 5%

Local taxes may be imposed

Not legal

Virginia

Sales tax = 5.30%

Excise = 21%

Sales tax = 5.30%

Maine

Sales tax = 5.50

 

Sales tax = 10%

 

Washington, D.C.

5.75% max

5.75%

Florida and Iowa

Sales tax = 6%

 

Illegal in both states

Michigan

Excise = 0

Sales tax = 6%

Excise = 10%

Sales tax = 6%

Connecticut

Excise = 0

Sales tax = 6.35%

Local taxes = 0

Excise = from ~1 to ~3 cents per 1 mg of THC

Sales tax = 6.35%

Local taxes = 3% of the municipal sales tax

Arizona

Excise = 5.6%

Local taxes = 2-3%

Excise = 5.6%

Sales tax = 16%

Local taxes = 2-3%

Ohio

7.25% maximum

Not allowed

Nevada

Sales tax = 6.85%

 

Excise = 10%

Sales tax = 6.85%

 

New Mexico

MMJ patients may be required to pay the gross receipt tax up to ~8%

The same, plus excise tax = 12%

New York

Excise = 7%

Sales tax = 9%

Local taxes = 4%

Rhode Island

7%

Illegal

Arkansas

Total levies = ~10%

Illegal

Oklahoma

Excise = 7%

Sales tax = 4.5%

Illegal, yet the bill to legalize recreational marijuana in OK is on the ballot this year

California

15% of the statewide levies + local taxes

Up to 38% of the total taxes

 

Tips On How To Make Your Weed Cheaper

As you can see, marijuana can be quite a burden for your budget. Moreover, in some states you can have problems with the police if you carry weed in your pocket. Can we do something to avoid excessive spendings and never break the law?

-20%

Get Your Medical Card In 5 Minutes

From $39 $49/year
Grab The Deal 🔥
StarMoney-back
Guarantee
Special offer ends
in 23:59:59

Conclusion

Dr.Weedy is the easiest and cheapest way for all MMJ users to get the medical cannabis card and enjoy all its benefits. And the first and the most significant one is that you’ll forget about the extra taxes the states impose on recreational weed purchases.

How useful was this post?

Click on a star to rate it!

5

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Leave a Reply

Your email address will not be published. Required fields are marked *

scroll to top