State With the Lowest Cannabis Tax Rate (2025 Guide)

Short answer

New Jersey has the lowest state-level tax rate on adult-use cannabis in the country: 6.625% at the register. Maryland is second at a flat 9%. Neither state layers on the fat excise taxes that push Washington and Illinois into the 20% to 40% range, and in both places a recreational purchase looks a lot like a normal retail transaction.

how are cannabis taxes calculated at dispensary

That is the headline rate, though. What you actually pay depends on where the flower was grown, how strong it is, and which town the shop sits in.

tax revenue from cannabis legal states

Why the headline number is only half the story

New Jersey charges 6.625% at checkout, but growers pay a Social Equity Excise Fee on every ounce they cultivate, and that cost rides into the wholesale price. Towns can also tack on up to 2% locally. So a Jersey receipt can land closer to 8.6% once everything is stacked, before you count the grower fee buried in the shelf price.

cannabis excise tax rates by state map

The low-tax field, state by state

• New Jersey: 6.625% sales tax, up to 2% local, plus a per-ounce fee paid by cultivators.
• Maryland: flat 9% sales and use tax. No separate excise, no local add-on, no potency math.
• Connecticut: 6.35% state sales tax plus 3% for the municipality, then a potency tax billed by THC milligram.
• Maine: 10% excise plus 5.5% sales tax, roughly 15.5% total.
• Michigan: 10% excise plus 6% sales tax.
• Oregon: 17% at retail with no general sales tax, and towns may add up to 3%.

Medical patients often pay nothing

Roughly half the states with legal medical programs exempt medical cannabis from sales tax. Maine, Connecticut, New Jersey, Maryland, Michigan and Oregon all treat a registered patient differently than a walk-in recreational customer. If your card is current in one of those states, the tax question mostly vanishes.

That matters more than any percentage point. A 6.625% rate sounds decent until you set it next to zero.

How to read the receipt

Ring up an eighth and the tax lines tell you plenty. Look for a state sales tax line, a municipal line, and a cannabis excise line. In a low-tax state you will usually see one or two. In Illinois you might see three, and the excise portion alone can reach 25% based on THC content. Potency taxes hit concentrates and vapes hardest, which is why a gram of wax often costs proportionally more than flower from the same shelf.

Alaska goes the other direction and taxes growers by weight. There, the register total moves with the harvest rather than the strain.

What this means when you shop

If tax is your deciding factor, Maryland and New Jersey are the cheapest adult-use markets in the country right now. If you qualify as a medical patient anywhere, confirm your card status first, because zero percent beats every rate on this list.

Supply still moves prices more than tax does. A glut year in Oregon drops shelf prices further than two points of tax ever will. Tax is just the predictable part of the bill.