More states have some form of cannabis legalization than don’t at this point, making many believe that plant access is abundant. The reality is that in many cases, the regulations have made people complacent. In many states where cannabis has been legal for over ten years, it remains felonious to grow a cannabis plant.
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Regulators will claim that allowing people to grow their own weed will feed the illicit market, taking dollars from the regulated one. Home grow advocates disagree, arguing that some people prefer to cultivate their own weed, much like others have tomato gardens during the summer. These home gardeners have not undercut Big Tomato, which begs the question of whether granting the right to cultivate cannabis at home would take revenue from the regulated space.
A plus to having various legality throughout the U.S. is the ability to compare the impact of disparate regulations. This data can be compared against fears like home grow rights taking away from regulated profits to reveal the true impact.
Comparing state home grow laws against tax revenue
One way to gauge whether allowing at-home cannabis cultivation rips into regulated industry profits is to look at a few case studies. Washington and Illinois only enable medical patients to grow weed. California, Oregon, Nevada, and Colorado allow anyone over 21-years-old to cultivate cannabis. Studying these states’ tax income against home grow laws may provide insight into the potential impact.
There are notable differences from state to state, like population and cannabis excise tax rates. Mixing all of this information (home grow laws, yearly cannabis tax income, excise tax rates, and population) by state provides a more refined view into whether letting people plant pot erodes the developing space.
Each state has individual cannabis regulations, taxes, and culture–but numbers speak the same language across all state lines.
California
Though many have complaints about Proposition 64, which effectively legalized cannabis in 2016, it does allow anyone over the age of 21 to grow up to six plants. Cities and counties may require permits or set other individualized regulations. However, most people in the state can grow weed at home.
California set the cannabis excise tax at 15 percent, and in 2023, the state brought in $1.1 BN. They collected the same amount in 2021 and suffered a small decline from $1.4B in 2021. Compared to lesser-taxed “vice” items, California collected $423M from alcohol tax last year from its 36M residents.
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Colorado
Like many states, Colorado allows adults six weed plants, but counties and cities can set their own laws. Those who purchase from the regulated market instead of growing at home will pay a 15 percent tax. As of 2022, 5.8M people lived there, and almost 80 percent were weed-buying age (21).
The state legalized weed first, back in 2012, right before Washington. In that time sales have oscillated up and down. In 2023 Colorado collected $274M in cannabis excise tax, a large decline from $325M in 2022 and $423M in 2021.
Illinois
Growing weed at home is only permitted for Illinois medical patients, they can nurture up to five plants. The state has a tiered excise tax structure. Products with less than 35 percent THC are taxed 10 percent at their sale and 25 percent for products testing above that. Infused products like edibles are taxed at 20 percent of the sale price.
Last year, Illinois collected $417M in cannabis excise taxes from its 12.6M inhabitants. The government announced this was a 15 percent increase from the previous year.
Oregon
Those in Oregon are permitted to grow up to four plants at home. They are also privy to one of the few remaining dispensary experiences where weed is weighed out from a huge jar of loose buds. (Get it while you can.) The excise tax there is set at a 17 percent base, localities can add more sales tax as they wish.
Weed operators in the state have struggled with record-low wholesale prices for years, leading to increased sales. According to the Oregon Liquor and Cannabis Commission (OLCC), the plant brought in $178M in 2021. The number has grown steadily since legalization in 2014. The U.S. Census estimated that about four million people lived in Oregon that year.
Nevada
The Nevada Cannabis Compliance Board grants adults who live 25 miles from the nearest dispensary the right to cultivate six plants, up to 12 per home. This removes most people in Clark County, which holds 73 percent of the state population. Those visiting dispensaries in the area will pay a 10 percent excise tax on weed purchases. In 2022, the Census clocked around 3M people living in the vast desert.
In 2023, the CCB and Department of Taxation report showed $133M in cannabis tax income. Numbers are down from 2022 ($152M) and 2021 ($159M).
Washington
Washington voters legalized cannabis for adult use in 2012 but only medical patients are allowed to grow weed at home. Patients are permitted to grow four plants at their house. If multiple medical patients are roommates, 15 can be cultivated in one residence.
The weed excise tax is 37 percent, and in 2023, ten years after the first legal sale, the state collected $469M in cannabis taxes. The year before (2022) they raked in over $510M, and in 2021, collected $555M. This number has steadily decreased since 2021 despite continued population growth (currently 7.7M).
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Quick look: cannabis excise tax vs. home grow laws
California
Population: 36M
Cannabis excise tax: 15% + state sales taxes
2023 cannabis excise tax collected: $1.1B
Home grow: Six plants
Colorado
Population: 5.8M
Cannabis excise tax: 15% + state sales taxes
2023 cannabis excise tax collected: $274M
Home grow: Six plants
Illinois
Population: 12.6M
Cannabis excise tax: 10-25%
2023 cannabis excise tax collected: $417M
Home grow: Medical only
Oregon
Population: 4M
Excise tax: 17% + state sales taxes
2021 cannabis excise tax collected: $178M
Home grow: Six plants
Nevada
Population: 3M
Cannabis excise tax: 10%
2023 cannabis excise tax collected: $133M
Home grow: Six plants
Washington
Population: 7.7M
Cannabis excise tax: 37%
2023 cannabis excise tax collected: $469M
Home grow: Medical only
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What do all these numbers mean for home grow?
In a time of equalized inflation and recession, many Americans are spending less money across the board. This was displayed in each cannabis excise tax report despite population or locality. While this signals a decline in cannabis sales, it does not correlate to home grow laws.
Whether states allow citizens to grow weed at home or not does not seem to equate to lesser tax income. When looking at tax rates and population against the listed income, most states bring in similar sales despite laws.
At the end of the day, cannabis regulators are so busy that home cultivation is likely far from the top of their list. If consumers in barred states want home grow rights, they must start the charge.
