Recreational marijuana sales ballooned in 2021

Suzanne Kreiter
·2 min read

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Legal, recreational-use marijuana sales boomed across the United States in 2021, reaching new levels in nearly a dozen states.

Nationwide, those sales generated more than $3 billion in tax revenue for 11 states, including California, Colorado, Illinois, Michigan and Nevada. That's higher than the $2.7 billion collected from the 10 states that allowed recreational marijuana sales in 2020, according to a report from the Marijuana Policy Project.

Seven out of the 11 states had their biggest year of marijuana tax revenues on record, according to an NBC News analysis of state revenues.

Sales figures for Alaska, California, Oregon and Washington were still pending for last quarter.

Eighteen states have legalized recreational-use marijuana as of Thursday. Connecticut, New Mexico, New York and Virginia legalized sales in 2021. And six states, including Vermont, Montana, New York, New Jersey, New Mexico and Connecticut, have begun or plan to begin sales this year.

Virginia won’t begin legal sales until 2024; plans in Washington, D.C., are in limbo, pending action from Congress.

Of the five states with the biggest revenues, recreational marijuana has been legal for at least eight years in two of them.

Washington and Colorado both started sales in 2014. That year, Colorado brought in an estimated $46 million, growing 819 percent to $423 million last year. In 2014, Washington took in about $22 million in marijuana taxes, and that number grew to $480 million in 2021.

The cash infusion was a boon to cash-strapped states such as Illinois, which was facing a budget crunch because of rising pension costs. The state recorded nearly $1.4 billion in recreational adult-use marijuana sales — more than double the $669 million in 2020, the first year of legal sales in the state, according to data from the Illinois Department of Financial and Professional Regulation.

Last year, the state took in an estimated $424 million in taxes from recreational sales, according to data from the Illinois Department of Revenue. The state kept $298 million, and allocated the rest to local municipalities, according to the Illinois Comptroller's Office.

While Illinois earmarks 20 percent of its tax revenue to mental health programs and 25 percent to grants aimed at repairing the societal harm caused by drug arrests, about a third of the money goes into the state’s general fund. That fund can go a long way to paying down the state’s debts. Last year was the first time in 25 years that the state received a credit rating upgrade.

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