Last verified: March 2026
Tax Structure Breakdown
Vermont applies three layers of tax to recreational cannabis purchases:
| Tax | Rate | Notes |
|---|---|---|
| Cannabis Excise Tax | 14% | Cannabis-specific tax applied at point of sale |
| State Sales Tax | 6% | Standard Vermont sales tax |
| Local Option Tax | 0–1% | Municipalities that opt in may add up to 1% |
| Total | 20–21% | Varies by municipality |
Medical cannabis is exempt from all taxes — a meaningful benefit for the approximately 4,000 patients in Vermont's medical program who often purchase higher-potency products at greater frequency than recreational consumers.
Revenue Allocation
Vermont's tax revenue flows through three distinct channels, each with a specific policy purpose:
6% Sales Tax → Universal Afterschool and Summer Special Fund
The entire 6% state sales tax collected on cannabis is directed to the Universal Afterschool and Summer Special Fund. Vermont is one of the few states to designate cannabis tax revenue for youth programs that are not punitive or enforcement-focused — a deliberate policy choice that funds enrichment rather than prohibition.
14% Excise Tax → General Fund & Substance Misuse Prevention
The 14% excise tax is split between two destinations:
- 70% flows to the General Fund for state government operations
- 30% (capped at $10 million annually) flows to the Substance Misuse Prevention Special Fund
The $10 million cap on substance misuse funding means that once excise revenue reaches approximately $33.3 million, any additional 30% allocation reverts to the General Fund. As of FY2025, the cap has not yet been reached.
Licensing Fees → Cannabis Regulation Fund
All licensing fees — application fees, annual renewal fees, and penalty assessments — flow to the Cannabis Regulation Fund, which finances the CCB's operations. This self-funding model means the regulatory agency does not depend on General Fund appropriations.
Revenue Growth
Vermont's cannabis tax revenue has grown rapidly since the first stores opened in October 2022:
| Fiscal Year | Tax Revenue | Change |
|---|---|---|
| FY2023 | $12.5 million | — |
| FY2024 | $26.9 million | +115% |
| FY2025 | $31.2 million | +16% |
The dramatic growth from FY2023 to FY2024 reflects the market's first full year of operation, while the more modest FY2025 growth suggests the market is beginning to mature. The revenue growth slowdown also coincides with CCB licensing pauses and increasing competition from the persistent illicit market.
Medical cannabis patients pay $0 in cannabis taxes. With a 20–21% combined tax rate on recreational purchases, the medical card offers significant savings for patients who purchase regularly.
For in-depth cannabis education, dosing guides, safety information, and research summaries, visit our partner site TryCannabis.org