Some towns miss out on cannabis tax windfall

Some towns miss out on cannabis tax windfall

It was smiles all around at Millis Town Hall when officials received an $88,046 check from CommCan Inc. – the only recreational marijuana dispensary in town.

The amount reflected three months of business after the location opened late last year, with the optional local 3% sales tax owed by every marijuana company in Massachusetts as part of the host community agreement.

Massachusetts cannabis sales met expectations in 2019, with $420 million in gross income, according to the Cannabis Control Commission, with an extra $17 million coming in since the Nov. 20, 2018, opening of the state’s first store.

The amount has cycled back into communities where the stores have opened. It has helped the businesses thrive and has offered Massachusetts residents safe sale and consumption.

But not all communities are seeing the benefits of the gross earnings for 2019. Towns like Southboro have had a recreational sales ban since 2016, when Question 4 was approved.

Although statewide recreational sales were approved on a majority vote among towns and cities, not all voted yes.

Each of Southboro’s three precincts voted no. As a result, it is one of the more than 80 communities that not only reject recreational marijuana businesses, but also miss out the potential profits from sales taxes like those seen in Millis.

But Southboro is still home to one dispensary. It is CommCan’s second location, and it operates only for medical sales under a separate law approved by voters in 2012.

Matthew Herrold, the company’s marketing associate, says sales tax benefits the towns where the company operates. Although the Southboro store doesn’t generate tax revenues, it still contributes to the town through a variety of donation drives.

“This business does something to serve people’s health and needs,” said Herrold. “We have opened 90 local jobs between our two locations. We organize toy drives, food drives and donate to a huge audience to create awareness about safe marijuana use.”

Herrold also pointed out how one of the donation drives the company organizes aims to help those formerly imprisoned with drug charges. On Feb. 11, the company donated $1,500 to Dismas House in Worcester, which employs former prisoners.

“Companies (that) want to can make real changes,” said Herrold.

But Herrold does not see the ban as a lost battle for communities where medical facilities are the only viable option for cannabis products. He said that the almost 60,000 active patients in Massachusetts who have been issued a medical marijuana ID still see benefits, citing financial savings.

“Way ahead, (customers) come out saving a lot of money,” he said. “We offer a 17% discount for first-time patients. After that, there are discounts up to $200.”

Medical sale locations are enough of a cannabis presence in Southboro for people like Cheryl Bisceglia, a resident who was one of the thousands who voted against recreational sales in 2016. She cites the unknown damage of the effects of marijuana.

“We don’t know much about it,” Bisceglia said. “Until not long ago people thought vaping was harmless, but look at what’s happening now,” referring to the five vaping-related deaths in Massachusetts, the latest confirmed last week.

When asked about the financial benefits from recreational sales in towns like Millis, Bisceglia put it simply, “I don’t think it matters when you see people dropping like flies from vaping.”

Jim Borghesani, chief operating officer of Tudestr, a cannabis consulting organization, feels strongly that bans on recreational sales reflect baseless fears and stigmas.

″(Marijuana) bans,” he said, “are largely a result of hysteria from 100 years of prohibition. Banning recreational sales (gives) a green light to illegal sales.”

Borghesani echoed Herrold regarding the benefits of recreational marijuana businesses. He mentioned the sales tax, the charitable contributions, and job openings as reflections of how “prohibition has failed,” and why “every year (recreational marijuana) gets more support.”

When asked about decriminalization on a federal level, Borghesani exclaimed, “Oh God, yes! Marijuana is categorized as a Schedule I drug, with heroin, which is utterly ridiculous.”

Unlike Bisceglia, many in Massachusetts seem to agree with Borghesani.

Todd Earle of Leominster, who works in Southboro, said the town “should probably change (its) position” on recreational cannabis sales.

“Working with people living in Southboro I’ve understood that they’re more old-school, and I don’t think they understand,” he said. “They’re more conservative that way.”

“I think there’s a lot of money lost,” said Worcester resident Stacey McKenna. “People are going to smoke weed no matter what. Why not have it regulated?”

McKenna has seen Good Chemistry flourish in Worcester as a recreational location. She said she sees little downside in having recreational sales in place.

However, “From what I hear, people say it’s more expensive than buying it on the street,” she said. “But considering the medical benefits, I think the negatives of regulating it do not compare.”

Ashley Maddock of Southboro remains skeptical.

“While I do think a lot of cities and towns could benefit from recreational sales, I do think that it’s not something that (Southboro residents) are going to want,” she said.

Reversing a ban is not unusual in Massachusetts. After having voted no on Question 4, Mashpee residents decided to eventually reject the ban, speculating about the benefits from the taxation.

On Feb. 8, Triple M, a currently medical-only facility, received a provisional license for recreational sales by the CCC.

Companies like CommCan see a fruitful future with the current situation not affecting business – perhaps only the communities.

“We have grown,” said Herrold, “and just like the rest of the industry, we will continue to grow.”

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