Medical cannabis sales in Washington, D.C. have increased, with April 2025 dispensary sales reaching $5.46 million, generating an estimated $327,000 in sales tax. This represents a 90% increase in sales tax revenue compared to April 2024. Despite this growth, cannabis sales tax currently accounts for a small portion of D.C.’s overall revenue, with a 6% tax rate, which is lower than taxes on hotels (15%) and alcohol and entertainment (10%).

For legal cannabis businesses in D.C., significant financial obligations exist, including high licensing fees and both local and federal taxes, such as 280E. Last year, the city collected an estimated $2.2 million in cannabis sales tax.

Beginning in Fiscal Year 2027, cannabis tax revenue is designated to shift from the Healthy D.C. & Health Care Expansion Fund to the Medical Cannabis Social Equity Fund, as outlined in the 2022 Medical Cannabis Amendment Act. This fund is intended to reinvest cannabis revenue into communities disproportionately affected by past cannabis enforcement. However, the fund’s future has been subject to discussion, particularly after Mayor Bowser proposed a $6.5 million reduction from its Fiscal Year 2025 budget. Additionally, a planned two-week cannabis sales tax holiday in April 2025, stipulated by the same legislation, was not implemented due to reported funding limitations.