Marijuana Taxes Exceeds Alcohol Taxes in at Least Eight States, Analysis Finds

Marijuana excise taxes generated more revenue than alcohol-specific taxes and state liquor profits in at least eight states over a recent 12-month period, according to an analysis by The Marijuana Herald of newly updated federal data and state financial records.

The eight states are Arizona, California, Colorado, Maryland, Massachusetts, Missouri, Nevada and New York.

The analysis compared marijuana excise tax collections with the U.S. Census Bureau’s T10 “Alcoholic Beverages Sales Tax” category during the 12-month period from July 2025 through June 2026.

However, the federal alcohol-tax figures substantially understate alcohol revenue in several states where the government controls the wholesale or retail sale of distilled spirits.

In those states, governments generate additional alcohol revenue through liquor markups, profits and transfers that are not included in the Census Bureau’s alcoholic beverage sales tax category.

After accounting for those systems, eight states remained where marijuana generated more revenue than alcohol under the measures examined.

New Mexico was effectively tied under the federal tax figures, with both marijuana and alcoholic beverage sales taxes totaling about $48 million during the period. Because the figures are rounded, The Marijuana Herald did not count New Mexico as a marijuana lead.

Among the eight states included in the comparison, Colorado had one of the largest differences. The state generated approximately $221 million in marijuana excise taxes during the 12-month period, compared with $56 million in alcoholic beverage sales taxes, meaning marijuana taxes were nearly four times as high.

Maryland generated approximately $109 million in marijuana taxes compared with $38 million in alcoholic beverage sales taxes, while Nevada collected approximately $106 million from marijuana compared with $45 million from alcohol.

Arizona generated approximately $175 million in marijuana excise taxes compared with $88 million in alcoholic beverage sales taxes.

California had the largest difference in dollar terms. Marijuana excise taxes totaled approximately $645 million during the period, compared with $410 million in alcoholic beverage sales taxes, a difference of about $235 million.

Massachusetts generated approximately $175 million in marijuana excise taxes compared with $98 million in alcoholic beverage sales taxes, while Missouri generated approximately $87 million from marijuana compared with $49 million from alcohol.

New York was the closest of the eight states, generating approximately $285 million in marijuana excise taxes compared with $272 million in alcoholic beverage sales taxes, putting marijuana ahead by about 5%.

Vermont was excluded from the list after additional alcohol-specific state revenue was taken into account.

The state reported approximately $20.1 million in fiscal year 2025 revenue from its state-controlled spirits system, while Vermont also collected about $27.4 million through its separate Alcoholic Beverage Tax on drinks sold for immediate consumption. That alcohol-specific tax alone exceeded the approximately $21.8 million in marijuana excise taxes collected during the federal 12-month comparison period.

The Vermont figures also cover different reporting periods, with the alcohol figures based on fiscal year 2025 and the marijuana comparison covering July 2025 through June 2026.

The comparison varies substantially by state because marijuana and alcohol are taxed differently.

Some states tax marijuana based on retail price, while others use weight, THC content or other methods. Alcohol taxes also vary by product and state, and several states generate additional revenue by directly controlling distilled-spirit sales.

Washington offers one example of how those differences can affect the results.

The Census Bureau reported that Washington generated $53.25 in marijuana excise tax revenue per resident during the period, the highest amount in the country. Its approximately $426 million in marijuana excise taxes nevertheless remained below roughly $452 million in alcoholic beverage sales taxes.

The findings should not be interpreted as showing that consumers spend more on marijuana than alcohol in states where marijuana generates more government revenue. Tax rates and structures differ significantly between the two products.

The analysis also does not include every dollar governments receive from either industry. General sales taxes, licensing fees and other charges are generally excluded, except for state liquor-system revenue needed to account for states where government-controlled alcohol sales make the federal tax figures incomplete.

When the Census Bureau began collecting marijuana excise tax data in 2021, only 19 states and Washington, D.C., were included. That number has since grown to 30 states and D.C.

Total marijuana excise tax collections increased from approximately $3.06 billion in fiscal year 2022 to $3.55 billion during the latest 12-month period.

Even after accounting for state-controlled liquor systems, marijuana excise taxes now generate more revenue than alcohol-specific taxes and liquor profits in at least eight states.