How Does Cannabis Tax Benefit Massachusetts?

Veteran Stephen Mandile, a former sergeant in the Army National Guard, made the first purchase of recreational marijuana in Massachusetts at Cultivate in Leicester, MA. (Jesse Costa/ WBUR )

Veteran Stephen Mandile, a former sergeant in the Army National Guard, made the first purchase of recreational marijuana in Massachusetts at Cultivate in Leicester, MA. (Jesse Costa/WBUR)

On November 20, 2018, marijuana was legally sold in Massachusetts for recreational purposes for the first time. The next day, the state Cannabis Control Commission announced cannabis enthusiasts spent a total of $440,011 buying 10,700 individual cannabis products at the only two recreational cannabis shops open at the time in the state.

Over the next five days, cannabis sales spike to $2.5 million.

7 days later pot sales total $4.8 million.

In the first two months, sales of marijuana products hit $23.8 million!

Dollars and sensimilla.

Massachusetts collects a 17% state marijuana tax on cannabis sales.

6.25% sales tax

+ 10.75% excise tax

= 17% state marijuana tax

Then, the town or municipality where the cannabis shop operates can levy a tax up to 3%.

Consumers in Massachusetts can expect to pay up to 20% tax on cannabis products.

Cannabis marketing. CBD vs THC. Cannabis laws, licenses, and fees. Succeed in the cannabis industry.

Where does the money go?

The 6.25% sales tax goes into the state’s general fund. This is where all the sales tax collected on qualifying purchases goes.

The 10.75% excise tax—along with revenue from business application and licensing fees—goes into a Marijuana Revenue Fund, which is used to fund operating expenses of the Cannabis Control Commission (roughly $8 million annually).*

The up to 3% local tax goes to the operating budget of the host community.

Cannabis industry jobs in Massachusetts. Cultivate marijuana in Mass. Pot shop jobs in Boston.

* Surplus in the Marijuana Revenue Fund goes to initiatives aimed at helping disadvantaged communities disproportionately impacted by “high rates of arrest and incarceration for marijuana offenses,” according to the Cannabis Control Commission. These efforts include:

• Public awareness campaigns

• Public and behavioral health, including evidence-based substance abuse prevention and treatment

• Local grants for youth education

• Public safety

• Municipal police training

• The Prevention and Wellness Trust Fund

• Restorative justice and diversion programs

• Workforce development, mentoring, and technical assistance in the cannabis industry

Click the leaf if you own a cannabis business.

Click the leaf if you own a cannabis business.

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