Cannabis Taxes Outpace Alcohol Taxes in Massachusetts

Excise taxes for adult-use cannabis in Massachusetts outpaced the state’s alcohol taxes for the first time through December, reaching $74.2 million compared to $51.3 million, according to Cannabis Control Commission (CCC) figures outlined by the Associated Press. It’s the first time cannabis tax revenues topped those of alcohol.

Massachusetts adult-use cannabis sales carry a 10.75% tax, along with a 6.25% state sales tax and local taxes of up to 3%. Last fiscal year, the state’s total cannabis tax revenues reached $208 million.

From 2018 through November 2021, Massachusetts retailers sold $2.3 billion worth of adult-use cannabis. CCC Chairman Steve Hoffman has described the sales figures as “pretty phenomenal.”

Since Massachusetts became the first New England state to allow adult-use cannabis operations, 179 stores have started operations, including 325 adult-use establishments which encompass indoor and outdoor cultivators, product manufacturers, microbusinesses, delivery businesses, and independent testing labs, according to the state data. The sector employs more than 17,000 people in the state.

In the first quarter of last year, cannabis tax revenues in Illinois surpassed those of alcohol, totaling $86 million compared to $72 million.

Adult-use cannabis remains popular among Bay Staters — a November University of Massachusetts-Amherst and WCVB poll found 61% of respondents had a favorable view of the reforms, with 13% holding somewhat or very negative views on the reforms.