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Minnesota just raised its tax on legal marijuana from 10 percent to 15 percent, and legal cannabis businesses are worried. Minority-owned shops, small dispensaries, and advocates say this sudden bump may push customers toward illegal sellers—especially before the legal market is fully operational.
One longtime marijuana advocate, State Senator Ann Rest, put it bluntly: “What we saw in California is that the high tax on legitimate cannabis leads straight to the black market,” she warns. She fears Minnesota might follow the same path.
Here’s how the numbers stack up:
- Minnesota’s new 15 percent cannabis tax makes it one of the highest in the country, trailing only California, Oregon, Arizona, and Washington.
- When you add in the normal state sales tax (about 6.9 percent) and local taxes—like in Minneapolis, where local rates push the total to over 24 percent—the cost can be overwhelming for consumers.
Business owners say they’ve already seen the effect. Many customers stocked up on cannabis ahead of the increase to avoid paying more. Some even walked out mid-purchase after hearing the final price at the register.
This is happening as the state begins licensing recreational dispensaries—many of which are struggling to compete with the illicit market’s lower prices and no overhead.
One local shop owner summed it up simply: legal businesses just can’t match the black market when taxes nearly double the price. That kind of cost difference can push buyers to unregulated sources—even if they’d prefer the safety and quality of licensed dispensaries.
In response, some lawmakers argue the tax increase needs a deadline. Representative Nolan West pushed for a sunset clause to roll the tax back by 2027—saying the hike makes legal cannabis “uncompetitive” and leaves cities with no share of the revenue. But his amendment failed.
These concerns echo what other states experienced in early legalization stages. When California passed a 15–20 percent state tax on top of sales tax, illegal sales continued to boom. It took years—and often tax cuts or enforcement efforts—to bring buyers into the legal fold.
Minnesota leaders are betting on long-term gains. The state projects that the increased tax could bring in roughly $76 million over the next two years—funding state programs and balancing the budget. The tax hike came from a last-minute budget deal between the governor and legislative leaders, including Republican and DFL lawmakers.
But legal cannabis advocates say it’s too early, and too heavy. The industry is still building—retailers are setting up, consumers are learning, and supply chains are lining up. A steep tax at the very start risks undermining the entire effort to create a safe, regulated, and sustainable cannabis market.
At High Science, we understand both sides: budgets need funding, and industries need fair ground to grow. Whether it’s cannabis apparel, education, or advocacy, we support smart policies that prioritize access, equity, and long-term growth—over short-term gains.
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