Metro

Marijuana taxes could bring in more than $100 million annually

Boston, MA--3/20/2017 - The first to testify is Treasurer Deborah B. Goldberg (cq), left at small table. The Legislature's Joint Committee on Marijuana Policy holds its first public hearing at the State House. Photo by Pat Greenhouse/Globe Staff Topic: 21pothearing Reporter: Joshua Miller

Pat Greenhouse/Globe Staff

The Legislature's Joint Committee on Marijuana Policy conducted its first public hearing at the State House on Monday.

State revenue officials predicted taxes on marijuana could eventually bring in more than $100 million each year. The attorney general’s office encouraged lawmakers to clarify how cities and towns can prohibit pot stores. And a long bearded man argued that bills to adjust the state’s new marijuana law are “essentially shredding the will of the people.”

Together, the varied testimony Monday at the first hearing of the Legislature’s Joint Committee on Marijuana Policy reflected the complexities of the legalization measure passed by 1.8 million voters last fall. At the core of questions from lawmakers was how to balance their competing responsibilities: respecting the voice of the voters, while adjusting the cannabis law to best protect public health and maintain order.

Advertisement

“We recognize that folks want it legalized,” said Senator Linda Dorcena Forry, a Dorchester Democrat. “But we want to make sure that it’s done in a safe manner.”

Once an initiative petition passes, it is like any other law, which means the Legislature can amend it. But elected officials are often reluctant to tinker with what their constituents have directly approved.

Get Fast Forward in your inbox:
Forget yesterday's news. Get what you need today in this early-morning email.
Thank you for signing up! Sign up for more newsletters here

Already, lawmakers have made one significant change: delaying the expected start date for commercial marijuana sales from January 2018 to July of that year. And Monday they expressed interest in making further adjustments, including potentially raising the pot tax rate.

The advocates who campaigned successfully for the measure, which legalized adult possession and use of marijuana, testified that the Legislature ought to leave the current law unchanged. They said Beacon Hill should wait for the regulatory body the law creates — a three-person Cannabis Control Commission appointed by the state treasurer — to offer recommendations on any changes that ought to be made.

That prompted a sharp question from Representative Mark J. Cusack, the House chairman of the committee: “Your view is basically we should be an advisory committee to the CCC?”

Advertisement

Will Luzier, who led the successful ballot campaign, replied that he is arguing for the Legislature to ask the commission for advice, and then act on the its recommendations, relying on the new agency’s expertise.

So, Cusack pressed, the duly elected representatives of the people of Massachusetts should take their cue from unelected appointees?

In testimony, Treasurer Deborah B. Goldberg made the case against legislative efforts to strip her office of cannabis oversight responsibility, or dilute it.

But Massachusetts Gaming Commission chairman Stephen Crosby said an oversight authority appointed by several elected officials, like the gambling commission, helps insulate its members from industry interference or even malfeasance.

One major area of discussion during the five-hour hearing was the tax rate on pot sales. The law sets a 3.75 percent tax on retail sales, plus a 2 percent local option tax — and that’s on top of the state’s 6.25 percent sales tax. That would mean a $100 pot brownie purchase could carry a state and local tax of $12.

For the first time, the state Department of Revenue on Monday offered public estimates of how much money all those taxes on retail pot sales, set to begin in July 2018, might bring in.

According to rough estimates, taxes on recreational marijuana could generate about $65 million in revenue in the first year of sales and about $130 million in the second.

That’s a significant sum. And the state pot tax alone would more than cover the expected costs of regulating the industry. (Goldberg projects startup costs would be about $10 million, including many one-time expenses.)

Most of the other seven states where recreational marijuana is legalized impose a much heavier tax. The Legislature is expected to raise Massachusetts’ rate, even as proponents testified that doing so would allow the black market to keep flourishing.

Both House Speaker Robert A. DeLeo and Senate President Stanley C. Rosenberg are open to raising the tax rate. But Governor Charlie Baker, who ran for office in 2014 pledging not to raise taxes or fees, was decidedly more qualified Monday.

Asked whether he supports raising marijuana tax, a Baker spokeswoman said the governor believes “the tax rate should reflect the cost of implementing the new law as well as any secondary costs associated with expanded use of marijuana.”

Depending on how secondary costs are defined — do emergency room visits, addiction treatment, or extra police officers count? — they could add up to thousands or millions of dollars. That, in turn, leaves Baker’s position on raising pot taxes opaque.

Top state officials spoke about other areas in the recreational pot law that might be changed.

Assistant Attorney General Margaret Hurley said the process for a municipality to limit or ban commercial marijuana establishments within its borders is “less than clear” in current law. So, she said Attorney General Maura Healey believes cities and towns would be greatly assisted by a “legislative clarification” of that issue.

In testimony Monday, several members of the public echoed the sentiment of legalization proponents.

“It’s premature to start looking to tweak and change these rules before there’s a market that has been created,” said Sieh Samura, a self-described cannabis consumer and advocate from Mattapan.

Others spoke movingly about how marijuana had allowed them to get off opioids. And still others expressed concern about certain aspects of the law, including the right of adults to grow up to 12 marijuana plants per household — and called on elected officials to repeal legalization entirely.

That won’t happen, said Cusack, one of the committee’s leaders.

“My hometown of Braintree did not support this,” he said in an interview after the hearing. “People tell me in Braintree, ‘Oh now you’re the chair, you’re going to ban it because we didn’t vote for it?’ I say, ‘That’s not in the job here. We’re implementation and regulation. We’re not going to rehash the debate.’ ”

Joshua Miller can be reached at joshua.miller@globe.com. Follow him on Twitter @jm_bos and subscribe to his weekday e-mail update on politics at bostonglobe.com/
politicalhappyhour.
Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
We hope you've enjoyed your free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com