alcohol tax

Massachusetts Cannabis Revenue Tops Alcohol For First Time

Massachusetts Cannabis Revenue Tops Alcohol For First Time

In 2016, recreational cannabis became legal in Massachusetts, and the first sales launched on November 20, 2018. For the first time, marijuana taxes eclipsed alcohol taxes in the state. A report from Boston’s WCVB-TV found the state brought in $74.2 million in cannabis excise taxes compared to just $51.3 million in alcohol taxes for the first six months of the Fiscal Year 2022, which runs from December 2021 to June 2022.

Adult-use cannabis sales carry a state-mandated 10.75 percent tax, plus an additional 6.25 in standard sales taxes. Towns and municipalities in Massachusetts can charge additional taxes of 3 percent. Massachusetts taxes alcohol at rates depending on its strength and volume. For example, taxes on wine are lower than higher alcohol (percentage of alcohol by volume) than whiskey, rum, or vodka.

In 2019, Massachusetts generated approximately $65 million in cannabis excise taxes and almost $112 million in 2020. The state’s Cannabis Control Commission reported that the average monthly cost per ounce of cannabis had been the lowest since the beginning of the pandemic.

In September of 2021, less than three years after the first two adult-use stores opened in the state, the Massachusetts Cannabis Control Commission reported that cannabis businesses statewide had passed $2 billion in gross sales.

“This number also underscores the entire agency’s tireless efforts, particularly those of our hardworking staff, to thoughtfully regulate a safe, accessible, and effective adult-use marketplace that keeps critical tenets of our mission – public health, public safety, and equity, among others – front of mind,” said Shawn Collins, Cannabis Control Commission Executive Director.

Considered “non-essential,” recreational Massachusetts dispensaries were closed for two months during the pandemic lockdown. Once they reopened, sales rebounded dramatically.

“It’s been a huge success, and the communities that began to work with cannabis organizations early got a big head start and started generating that tax revenue,” said Brandon Pollock, CEO of Theory Wellness.

Many Massachusetts residents who regularly met friends for drinks have switched to meeting up to spark some rolling papers and have a smoke sesh.

“In my circle, people drink less alcohol and smoke more weed,” said Massachusetts resident Olivia Letters. 

For many, the lack of hangover and nausea is a selling point. For others, it’s the lack of calories or the lower cost. Often the combination of these factors makes marijuana more appealing than alcohol.

Marijuana is the third most consumed psychoactive substance globally behind alcohol and nicotine. A new bill in the Massachusetts legislature, if passed, could double all alcohol excise taxes.

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