Mississippi Medical Cannabis Taxes — 5% Excise + 7% Sales

Last verified: May 2026

The Two-Tax Structure

• 5% excise tax on the first sale or transfer from cultivator to processor or dispensary, codified at Mississippi Code § 27-72-1. Fair-market-value calculations are published twice yearly by the Mississippi Department of Revenue (MDOR).
• 7% state sales tax at retail to the cardholder.
• Local taxes may apply in Jackson and Tupelo, which have special tax levies on dispensaries.

Tax revenue flows to the state’s general fund, not to a dedicated cannabis-program fund. This is unusual nationally — many states earmark cannabis tax revenue for education, public health, social-equity programs, or law enforcement.

2025 Tax Receipts

• $9.0 million — state sales tax on cannabis (calendar year 2025).
• $2.18 million — state excise tax on cannabis (calendar year 2025).
• ~$15–17 million combined — per Henry Crisler, MMMA executive director (January 2026), the program produces "close to $15 to $17 million in taxes each year for the state" when permit fees and ancillary revenue are included.

Year-Over-Year Trajectory

• FY 2023 (partial year): $11.2M retail sales / ~$0.78M sales tax / ~$0.5M excise.
• FY 2024: $75.3M retail / ~$5.3M sales tax / $7.5M excise + permit fees.
• FY 2025: $118.7M retail / ~$8.3M sales tax / $7.4M excise + permit fees.
• Calendar Year 2025: ~$139M retail / $9.0M sales tax / $2.18M excise alone.

Cumulative retail sales since launch crossed $300 million in early 2026, matching projections cited by industry analysts in early 2025.

Local Tax Levies — Jackson and Tupelo

Two Mississippi cities have adopted special tax levies on cannabis dispensaries that operate within city limits:

• Jackson — Hinds County seat; the densest dispensary cluster in the state. Multiple dispensaries on Lakeland Drive, Old Canton Road, and surrounding corridors.
• Tupelo — Lee County seat; the City Council passed cannabis zoning ordinances on April 5, 2022, using existing liquor and pharmacy ordinance frameworks.

These local levies are layered on top of the state 7% sales tax and the 5% excise. Effective combined tax rates in Jackson and Tupelo can run 13–15%+ depending on city ordinance specifics.

Federal Tax — Section 280E

Until federal cannabis rescheduling completes, Mississippi cannabis businesses face the IRC § 280E burden: federal tax law disallows ordinary business deductions (including labor, rent, marketing) for businesses "trafficking" in Schedule I or II controlled substances. Effectively, cannabis operators pay federal tax on gross profit rather than net profit, which is a substantial cash drag on the industry.

President Trump’s Executive Order 14370 (December 18, 2025) directed the U.S. Attorney General to "take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III." If completed, the change would relieve the § 280E burden for Mississippi operators — potentially freeing capital for product development, lower prices for patients, and easier banking. As of April 2026, the rescheduling rule had not been finalized. See economic impact page.

The Tax Mississippi Did NOT Adopt

Notably, Mississippi did not adopt:

• A potency-tiered tax (e.g., higher rates on higher-THC product, as some states use).
• A weight-based excise (e.g., per-gram rather than ad valorem).
• A dedicated medical-vs-recreational tax differential (Mississippi has no recreational program to differentiate from).
• A patient-relief mechanism (no tax exemption for terminally ill, low-income, or veteran patients beyond the application-fee waiver for disabled veterans and Medicaid).

Tax Revenue Flow

Mississippi’s cannabis tax revenue flows to the state’s general fund. There is no dedicated cannabis revenue allocation for:

• Law enforcement (some states allocate cannabis tax to drug-enforcement training).
• Public-health programs (Colorado, Washington allocate to substance-use prevention).
• Social equity / record expungement (Illinois, New York direct cannabis revenue to social-equity grants).
• Education (Arkansas funded free school breakfast with medical cannabis revenue under SB 59 in 2025).
• Veterans services (no dedicated allocation).

Reform advocates have proposed dedicated allocations in multiple sessions; none has passed.

Reading the Statutes

• Miss. Code Ann. § 27-72-1 — Cannabis Excise Tax
• MDOR — Mississippi Medical Cannabis Act