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Elevated taxes announced for legal marijuana in Massachusetts.

On Monday, Massachusetts’ lawmakers rolled out their proposed tax plan for the sale of legal marijuana in the Codfish State. Significantly less than the 56 percent tax plan first threatened by policy makers in June, the total tax rate under the new proposal could still hit 20 percent.

Question 4 was initially drafted, proposed, and passed last November based on a framework of a 12 percent tax rate – and won with 53.6% of the vote.

Now rewritten twice, the clandestine deal struck behind closed doors will break down something like this: local municipalities will have the option of assessing a 3% tax on any future recreational marijuana sales; the state will collect a 6.25% sales tax and a 10.75% excise tax will be assessed on all marijuana sales. The “medical use of marijuana” will not be taxed.

Able to opt out of legal sales until December 31, 2019 – those communities that voted against legalization in November 2016 will be mandated to hold a voter referendum on the issue, according to Mass Live.

“Under the deal announced Monday, Massachusetts communities that voted in November against the recreational marijuana ballot question will be able to ban local pot shops through action taken by their locally elected officials. Communities that voted “yes” have to hold a voter referendum if they want to ban or restrict pot shops.”

Anticipated to hit Gov. Charlie Baker’s desk before Friday, two pungent questions still hang in the air as Baker contemplates signing. Will the elevated tax structure on legal marijuana adversely affect its intended outcome of reducing the illegal marijuana market? And, how will the excise tax affect retail marijuana prices? I.E., how much will your next ⅛ of legal weed in Massachusetts cost?

A long time coming, this bill adheres to the basic fundamental will of the voters, addressing community concerns, zoning issues, and dispensary quotas. 

Massachusetts, marijuana taxes, and the black market

Good for law and order, and taking a real “bite out of crime,” establishing a fair and balanced tax rate on legal marijuana ultimately provides an increased revenue stream for law enforcement at the state and local levels. Historically bad for the illicit drug trade, legalizing cannabis usually denies street dealers access to one of their most lucrative clientele –  illicit pot customers. Conversely, prohibited pot reformed into a legal commodity provides critical funding for law enforcement, substance abuse prevention, and treatment programs – in addition to public health and education. By keeping cannabis legal and taxes low, the profitability is effectively extracted from the black market.

Cannabis Control Commission (CCC) Deadlines:

  • March 15, 2018
    • CCC shall promulgate rules and regulations for the issuance of licenses.
  • April 1, 2018
    • Accept applications for licenses.
  • April 1-15, 2018
    • Review applications of operating medical establishments and businesses that demonstrate experience in or business practices that promote economic empowerment in communities disproportionately impacted, for grant or denial of license.
  • May 1, 2018
    • Independent Testing Laboratory regulations and rules promulgated.
    • Regulations for Nantucket and Duke counties promulgated.
  • June 1, 2018
    • CCC may start issuing licenses for marijuana establishments.
  • December 31, 2018
    • If CCC has not yet transferred medical marijuana program from the Department of Health, the program automatically transfers.