Legislators from the State of Massachusetts are proposing sweeping changes to its recreational cannabis industry. They want to combine the state’s existing medical marijuana laws in Massachusetts with its recreational ones, change the structure of oversight, and increase taxation. The Marijuana Policy Committee heard these changes formally proposed during Wednesday’s hearing.
Marijuana Legalization in Massachusetts
The House will vote on these proposals and on Thursday, amend legislation for it. The Senate plans to craft its own marijuana laws too, and the Conference Committee will discuss the differences and draft a final proposal for the governor to sign before month’s end. What does this mean for cannabis consumers in Massachusetts, and hopefully nowhere else?
Here are some of the bill’s most notable takeaways:
Recreational weed will have 21.75 percent tax on it, 16.75 percent state tax and 5 percent an optional local tax on the gross income of cannabis sales. This means that instead of a sales tax, which occurs between the customer and the point of sale, the state will gather taxes from all revenues that marijuana businesses generate. This is compounding tax, and it will have severe repercussions for users.
The state would now receive more than 21.75 percent from all marijuana-related profits. If, for example, a grower sells $200 worth of weed to a supplier, he would only get $156.50 after tax and before any other expenses. When the supplier then sells it to cannabis dispensaries in Massachusetts, it is taxed a second time. The state will tax that same weed a third time when the customer buys it from the retailer.
In all these taxes, it is almost easy to forget the state’s existing sales tax of 6.25 percent, which consumers will likely pay for at checkout. This harms small businesses significantly. In the end, $200 worth of weed will cost $379.46 by the time consumers get it, and unless a business is cultivating, producing, and selling cannabis on the same premises, the price of weed will way outpace its value.
Even if one company grows, manufactures and sells cannabis itself, the state will tax it 28 percent. This is significantly highly than the initial 12 percent tax claimed on the original ballot. These are the legislative activities that cause prices to skyrocket. Consumers are going to foot the bill, as the cost of recreational marijuana will be frankly exorbitant and completely unaffordable for most.
The bill further proposes to fund a bevy of treatment programs and campaigns to prevent drug abuse, allocating $10 million from the money it collects from marijuana sales. However, no other specific causes receive appropriation revenues from the budget. The Cannabis Control Commission will use the money it needs to operate. The remaining funds revert to the coffers, without a specific plan for it yet.
Recreational and Medical Oversight
The Department of Public Health currently oversees all medical marijuana-related activities. The bill aims to change that. It proposes to combine both recreational and medical oversight under the authority of the commission, already tasked with issuing Medical Marijuana Cards, keeping records on patients, maintaining a database of registered doctors, and now overseeing recreational weed too.
In the ballot’s own language, towns must hold referendums if they do not want recreational cannabis dispensaries operating within. This gives authority to a board of selectmen known as the City Council. Municipalities only need to hold a voting session to ban recreational facilities completely. However, towns may not prevent people from using or carrying cannabis within their jurisdictions.
The Cannabis Control Commission, all five members of it, will remain within the State Treasurer’s office. It will retain operational independence, however. The attorney general, governor, and treasurer will each have their own commissioners, who will decide in a “majority” vote the appointments of the remaining two members. There are stark issues with this proposal.
Although the bill is still undergoing scrutiny and discussion, it is already clear that this particular structure deprives the Treasurer’s office of any accountability or operational authority. Without the involvement of Treasury, it becomes questionable whether implementation will be efficient, secure, or even safe. Such questions require answers.
The bill proposes many more rules and regulations. It even codifies in Legalese exactly how it wants companies to package cannabis and its products. Labeling laws will include marijuana warnings, cultivator names, testing and sample results, seal proof of testing, processing and manufacturing batch numbers, ingredient lists, use-by dates, and clear symbols to avoid confusion with other products.
Some are calling this bill a classic case of government overreach. When states compound taxes and force people to donate nearly a third of their profits, costs become too expensive for most to achieve. Companies fail. Prices rise. People lose jobs. The more regulations, taxes, and forceful state controls imposed on citizens, the fewer successful businesses there are to compete with each other.