States that have made marijuana legal have realized a huge return on their investment. A new report shows that since 2014, states have taken in $7.9 billion in marijuana tax revenue, including $2.7 billion in 2020 alone.

In addition to states taking in tax dollars, the cannabis industry also has supplied hundreds of thousands in taxes and fees to local counties, cities and towns, according to the report from the Marijuana Policy Project (MPP). Many of these taxes go to public projects that benefit schools, children and law enforcement.

The report might help sway politicians who still oppose legalization. Jared Moffat, state campaigns manager at MPP,  told Marijuana Business Daily that the report “is a great tool to have in the toolbox when talking to a legislator on either side of the aisle. Republicans might think about new revenue as a way to cut taxes somewhere else, while Democrats see opportunities to invest in socially beneficial programs.”

Colorado, Washington Lead the Way on Marijuana Tax Revenue

While experts projected that marijuana sales would generate a lot of tax dollars for state and local governments, the actual numbers have, in many cases, exceeded expectations.

Colorado, the first state to start legal adult-use sales in January 2014, has generated $1.5 billion in marijuana tax revenue through May 2021. By April 2021, the state had dedicated $404.5 million from cannabis tax dollars to improving the state’s public school system.

Cities within the state have also done well. For example, Denver has taken in $210.6 million in marijuana tax revenue, according to the report.

Washington, which started legal sales in July 2014, has taken in $2.5 billion in cannabis tax revenue. In Washington, about $600,000 of every $1 billion in cannabis tax revenue goes toward public health initiatives. They include a fund that provides health insurance for low-income families.

Marijuana Tax Revenue From Other States

While other states started later than Colorado and Washington on collecting marijuana tax revenues, they also have started to reach high totals in total tax dollars taken in. They include the following, according to the report:

• Oregon – $540 million
• Alaska – $78 million
• Nevada – $374 million
• California – $2 billion
• Massachusetts – $260 million
• Michigan – $136 million
• Illinois – $294 million
• Maine – $1.7 million

As with Colorado and Washington, these states are using cannabis tax dollars to support a variety of programs that promote social justice and equity.

“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities,” Moffat said in a statement. “But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care and a range of other beneficial public programs. It’s no wonder that residents in legalization states overwhelmingly see legalization as a success”