How Vermont Uses Cannabis Tax Revenue

Policy & Funding Insights

Vermont’s cannabis taxes fund youth education, afterschool programs, and addiction prevention.

When Vermont legalized cannabis, one of the promises was that tax revenue would be reinvested into the community. Today, the money generated through cannabis sales helps fund youth education, afterschool programs, and substance abuse prevention.

How Cannabis is Taxed in Vermont

  • 6% Sales Tax: Deposited into the Universal Afterschool and Summer Special Fund to expand access to afterschool and summer learning, especially in underserved areas.

  • 14% Excise Tax: First covers administrative costs for the state’s cannabis program. Remaining revenue goes to the General Fund, with 30% earmarked for substance misuse prevention via the Vermont Department of Health.

Where the Money Goes

Youth Education

  • Afterschool & Summer Learning: Sales tax revenue funds grants for new or expanded programs.

  • Substance Use Education: Excise tax dollars support youth education about the risks of drug use.

Addiction Treatment & Prevention

  • Prevention Programming: 30% of excise tax revenue (capped at $10M) supports statewide prevention initiatives.

  • Local Prevention Coalitions: Community partnerships receive grants to advance policy change and provide local resources.

  • Recovery Services: One-time allocations have supported recovery centers and treatment options, with ongoing support anticipated from excise tax revenue.

Operations

  • Administrative Costs Only: Excise tax covers Cannabis Control Board operations before distribution.

Overall Impact

Cannabis revenue has created targeted support for youth and health programs but remains a small share of state finances. A recent estimate of about $20 million in cannabis taxes amounted to less than 1% of the General Fund.

At a Glance

  • Two taxes: 6% sales, 14% excise.

  • Sales tax → Universal Afterschool & Summer Special Fund.

  • Excise tax → Admin costs first; 30% of remainder to prevention via Department of Health.

  • Funding reinvested in the community

  • Funding helps youth education, afterschool programs, and substance abuse prevention.

  • Total revenue is impactful but a small portion of the overall state budget.

Sources