Legal cannabis produces almost $8.4B in California taxes

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(The Center Square) – Legal cannabis sales in California have brought in nearly $8.4 billion in state tax revenue since legalization began, Gov. Gavin Newsom announced, framing the milestone as evidence that regulation and public safety can work in tandem.

According to new figures from the Governor's Office, the total includes nearly $4.5 billion in cannabis excise tax and roughly $3.4 billion in sales tax revenue.

In the second quarter of 2026 alone, cannabis retailers remitted $261.7 million in combined excise and sales tax revenue.

Newsom said tax dollars go toward public programs, including early childhood development, youth substance abuse prevention, medical research and environmental recovery projects.

“We are building a legal cannabis market that generates billions for Californians, and going after the illicit operators who undermine it,” Newsom said in a press release. “That’s public safety — protect consumers, support the businesses playing by the rules, and put the revenue to work in our communities.”

Still, industry critics argue focusing on revenue is looking at only one side of the ledger.

“If we’re being honest about how this could benefit Californians, we have to count the costs, and California has paid dearly for its choice to commercialize high-potency marijuana,” said Kevin Sabet, president and CEO of Smart Approaches to Marijuana, a nonprofit.

“Emergency room admissions have skyrocketed, impaired driving rates are up, and calls to poison centers have been increasing, just to name a few," Sabet told The Center Square.

Sabet added that the revenue figure for cannabis might sound like a lot, but it represents a tiny percentage of the state's overall revenue.

“We should be honest about what this policy choice has given us — a new big tobacco-style market targeting the vulnerable and living off the mantra of addiction for profit,” said Sabet.

Recreational marijuana became legal in 2016 after California voters passed Proposition 64. Small personal possessions became legal soon after the vote, and legal retail sales began on Jan. 1, 2018.

In California, recreational cannabis is legal for adults 21 and older. Cannabis for medicinal purposes is legal for ages 18 or older with a physician's recommendation, according to the California Department of Cannabis Control.