Weed Tax Revenue is Soaring in This Kentucky State City

The legalization of recreational marijuana in Kentucky has significantly boosted the state’s budget, particularly benefiting Louisville, its largest city, known for hosting the famous Kentucky Derby.

In 2023, Louisville experienced a remarkable surge in weed tax revenue, surpassing $20 million, marking a 50% increase from the previous year and making it the leading city in the state for marijuana tax income, outpacing Lexington, Frankfort, and Bowling Green.

Louisville’s Marijuana Taxation System

Louisville adheres to the state’s marijuana tax framework, which involves a 15% excise tax on the wholesale price of marijuana, a 10% sales tax on the retail price, and a 6% general sales tax on all purchases. Additionally, the city imposes a 3% local sales tax on marijuana sales, resulting in a total tax rate of 34%.

Louisville receives 25% of the state’s excise tax revenue, 50% of the state’s sales tax revenue, and 100% of the local sales tax revenue from marijuana transactions within its jurisdiction.

Allocation of Marijuana Tax Revenue in Louisville

Louisville has directed its marijuana tax revenue towards diverse programs and initiatives that enhance the city and benefit its residents. In 2023, major expenditure categories include:

  • Education: $5 million for scholarships, grants, and after-school programs for low-income students.
  • Public Safety: $4 million for police training, equipment, and community outreach.
  • Public Health: $3 million for substance abuse prevention, treatment, and recovery services.
  • Infrastructure: $2 million for road maintenance, transportation, and parks.
  • Economic Development: $2 million for job creation, workforce development, and support for small businesses.
  • Social Equity: $1 million for racial justice, criminal justice reform, and expungement of marijuana-related convictions.
  • Administration: $1 million for marijuana regulation, enforcement, and oversight.


Louisville stands out as a leader in the state’s marijuana industry, excelling in both sales and tax revenue. The city has wisely utilized its windfall from weed taxes to fund various programs and projects, enhancing the overall quality of life for its citizens.

With the continued growth and maturation of the marijuana market, Louisville anticipates reaping further benefits from the legalization and taxation of this plant.


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