On December 28, 2016, the Massachusetts state legislature voted to delay sales of recreational marijuana for six months. Originally, licensing for cannabis shops was set to begin on January 1, 2018, under the measure, but the delay set by legislators moved the date to July 1, 2018. Legislators cited needing more time to tinker with the measure as the reason for enacting the delay. Personal use, possession, and cultivation of marijuana all became legal on December 15, 2016.
Massachusetts cannabis market only in recreational part is expected to become a $1.17 billion industry by 2020. Research from multiple marijuana data and investment firms predict Massachusetts can become such a travel destination. If correct, an influx of tourists to Massachusetts can expand the economic impact of this legislation far beyond simply the marijuana industry.
The Department of Revenue estimates that the legalized recreational cannabis market could produce an estimated $64 million in tax revenue in the first year alone. The figure was mid-range given to the Committee on Marijuana Policy, a Legislative group compiled to analyze the state’s emerging recreational cannabis market.
According to the Department of Revenue analysis, in the first 12 months of the program, Massachusetts could expect to see between $45 million and $83 million in tax revenue from the sale of recreational cannabis – with an estimated $64 million in the middle of that range. In the second year, Massachusetts could expect tax revenue between $93 million and $172 million, on sales ranging between $707 million and $1.3 billion.
Under the new law, recreational marijuana will be taxed 17 to 20 percent. The baseline tax is 17 percent, which is determined from a combination of a 6.25 percent sales tax and a 10.75 percent special excise tax on adult use. But cities and towns can choose to add a three percent tax on top of the 17 percent, tallying up to a 20 percent tax on retail cannabis. Medical cannabis would not be subject to the tax.
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 started reviewing licenses for cannabis establishments.