State-legal cannabis sales in the U.S. totaled $29.1 billion in 2025, down from $30.1 billion in 2024, and the industry employed about 412,500 full-time-equivalent workers, according to the Vangst and Whitney Economics US Cannabis Jobs Report 2026. States collect hundreds of millions to billions a year in cannabis taxes: California alone has collected more than $8.1 billion since 2018. But falling prices mean many markets are selling more product for less money.
This page once held a 2019 opinion essay arguing that a cannabis economy could “restore trust in America” after years of stagnant wages. Seven years on, we can measure what the legal cannabis economy actually became. Below are the latest official figures from state regulators and tax agencies, plus the national jobs and sales estimates, as of October 27, 2026. Where a number comes from an industry report rather than a government source, we say so.
How big is the legal cannabis industry in 2026?
The most recent full-year estimate is $29.1 billion in state-licensed sales for 2025, a decline of about $1 billion from 2024. The figure comes from the US Cannabis Jobs Report 2026 by Vangst and Whitney Economics, as summarized by NORML on June 25, 2026. It is an industry estimate, not a government total, because no federal agency tracks cannabis sales: marijuana is still federally illegal outside the medical channel moved to Schedule III in April 2026.
Cannabis sales and taxes by state: the latest official numbers
| State | Figure | Source |
|---|---|---|
| California | $248 million in cannabis taxes in Q1 2026; more than $8.1 billion since January 2018 | CDTFA |
| Michigan | $242.3 million in adult-use sales in September 2026; 837 active adult-use retailer licenses | Cannabis Regulatory Agency |
| Illinois | $1.51 billion in adult-use sales in 2025 (not directly comparable to 2024’s $1.72 billion) | IDFPR |
| Colorado | $1.316 billion in sales and $236.4 million in state marijuana taxes in 2025; $3.11 billion in taxes since 2014 | Colorado Dept. of Revenue |
| New York | More than $4.1 billion in retail sales since the market opened; $1.41 billion in 2026 through Q3 | Office of Cannabis Management |
California
California collected nearly $248 million in cannabis taxes in the first quarter of 2026: $143.6 million in cannabis excise tax and $104.3 million in sales tax. Since January 2018 the state has collected more than $8.1 billion, including $4.34 billion in excise tax, more than $3.28 billion in sales tax and $500.6 million in cultivation tax before that tax ended on July 1, 2022, according to the CDTFA’s May 27, 2026 release. The excise rate returned to 15% on October 1, 2025 after a short-lived increase. See our California law guide for tax details.
Michigan
Michigan sold $242.3 million of adult-use cannabis in September 2026, up from $195.3 million in September 2022, while the average adult-use flower price fell from $109.88 to $59.99 an ounce. Those figures come from the Cannabis Regulatory Agency’s monthly reports. Michigan added a 24% wholesale tax on adult-use marijuana on January 1, 2026, on top of its 10% excise and 6% sales tax. Local governments with stores share the excise: LARA announced nearly $94 million in adult-use payments for fiscal year 2025.
Illinois
Illinois reported $1,506,740,852.75 in adult-use sales for 2025 on 52.1 million items, versus $1.72 billion on 49.0 million items in 2024. The IDFPR release of January 30, 2026 warns the years are not directly comparable: after the switch to Metrc tracking, the state found earlier months had often recorded pre-discount prices. More items sold for less money is the story of nearly every mature market.
Colorado
Colorado‘s sales peaked at $2.229 billion in 2021 and fell to $1.316 billion in 2025, while yearly state marijuana tax revenue fell from $423.5 million to $236.4 million. The state has still collected about $3.11 billion in marijuana taxes since 2014, according to the Colorado Department of Revenue. Our Colorado sales history has every year since 2014.
New York
New York‘s legal market passed $4.1 billion in reported retail sales program-to-date, with $512.6 million in the third quarter of 2026 and $1.41 billion for the year through September. As of the October 1, 2026 board meeting, 712 of 1,039 licensed adult-use retailers were open, per the Office of Cannabis Management. It is one of the few markets still growing fast, because stores are still opening. Details are in New York Passes $4 Billion in Legal Weed Sales.
How many jobs does the cannabis industry create?
The state-legal cannabis industry employed about 412,500 full-time-equivalent workers in 2026, according to Vangst and Whitney Economics, with California (57,500), Michigan (42,500) and New York (28,660) the largest employers. That is down from 425,002 in the 2025 report and 440,445 in the 2024 report, as Ganjapreneur and NORML reported. New York and Maryland posted the largest year-over-year job gains. Federal labor statistics do not break out cannabis as an industry, so these industry counts are the best available estimate.
Why are cannabis sales falling in older markets?
Mainly because prices keep dropping: more licensed growers and stores compete for the same customers, so shoppers buy more product while spending less. Colorado’s average market rate for retail bud, the wholesale benchmark used for its excise tax, was $1,309 a pound in mid-2021 and $601 a pound for October to December 2026 (Colorado DOR). New markets such as New York, Ohio and Maryland add sales, while the older West Coast and Colorado markets shrink in dollars. Our cannabis prices by state report tracks retail prices.
Where does cannabis tax money go?
It depends on the state: common uses include schools, public health, local governments and community reinvestment funds for areas hit hardest by prohibition. Michigan shares excise revenue with cities, counties and tribes that host stores. New York splits its adult-use tax revenue 40/40/20 among education, community reinvestment and drug treatment and prevention, per OCM’s 2025 annual report. Maryland sends about 30% of adult-use tax revenue, after regulator costs, to its Community Reinvestment and Repair Fund. Ohio puts 36% of its 10% excise into a Host Community Cannabis Fund for towns with dispensaries.
What could change the cannabis economy next?
- Federal taxes. The April 2026 order (91 FR 22714) says state medical licensees are no longer subject to Section 280E, the rule that bars normal business deductions for Schedule I and II sellers. Adult-use sellers are still covered, pending the broader DEA rescheduling case.
- The hemp deadline. Under P.L. 119-37, most intoxicating hemp products leave the legal hemp definition on November 12 and December 11, 2026, which could push some demand back to licensed dispensaries. See Hemp’s Two Deadlines.
- Massachusetts. Voters decide on November 3, 2026 whether to repeal adult-use sales while keeping medical marijuana, Ganjapreneur reported.
- Banking. Visa and Mastercard still prohibit cannabis purchases (GAO, August 2026), and the SAFE Banking Act of 2026 has not moved past committee.
What this means for you
For shoppers, the shrinking dollar figures are mostly good news: in Michigan the average adult-use ounce fell from $109.88 in September 2022 to $59.99 in September 2026. For taxpayers, cannabis is a steady but smaller revenue source than early forecasts promised, and it falls when prices fall. For job seekers, the industry still employs over 400,000 people, with the largest recent job gains in New York and Maryland.
What this means for dispensaries
Revenue per item is falling almost everywhere, so margin depends on buying well, controlling discounts and managing tax exposure. If you hold a state medical license, ask your cannabis CPA how the April 2026 Schedule III order affects your 280E position; adult-use operators should plan for 280E to keep applying until the DEA case ends. Watch the hemp dates for a possible demand shift, and if you operate in Massachusetts, plan for both outcomes of the November 3 vote. Our Dispensary Business section covers taxes, compliance and pricing for operators. This is general information, not tax advice.
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Cannabis Economy FAQ
How much money does the legal cannabis industry make?
About $29.1 billion in state-licensed sales in 2025, according to Vangst and Whitney Economics. That is revenue across all legal states, not profit.
Which state sells the most cannabis?
California is the largest market and employer, with about 57,500 cannabis jobs in the 2026 jobs report and more than $8.1 billion in cannabis taxes collected since 2018.
How many people work in the cannabis industry?
About 412,500 full-time-equivalent workers in 2026, down from 425,002 a year earlier, according to Vangst and Whitney Economics.
How much tax revenue does legal weed generate?
It varies widely: California collected about $248 million in Q1 2026 alone, while Colorado collected $236.4 million in all of 2025.
Why are cannabis sales going down?
Mostly falling prices. In mature markets shoppers buy as much or more product, but each item costs less.
Figures as of October 27, 2026 from the sources linked; state numbers are revised as late returns arrive. General information, not financial, tax or legal advice.
