Marijuana Tax Proposal in Connecticut Similar to Massachusetts Model

The tax structure being considered by Connecticut lawmakers for cannabis is very similar to the one used in Massachusetts.

Supporters of legalization say it’s about remaining competitive in a new marketplace.

Rep. Jason Rojas, (D – East Hartford), who chairs the General Assembly’s Finance, Revenue and Bonding Committee told NBC Connecticut, “naturally, we don’t want to incentivize anybody to go over the border to Massachusetts if they are going to purchase cannabis. We tried to keep our rate consistent with the overall effective rate of where Massachusetts is.”

In Massachusetts, all sales are subject to the state sales tax of 6.25 percent and a 10.75 percent state excise tax. There is also a 3 percent local tax for the municipality where the dispensary is located. Those taxes amount to about a 20 percent effective tax rate.

In Connecticut, lawmakers are considering a similar proposal. All sales would be subject to the state sales tax rate of 6.35 percent, a state levied tax on transfers from growers of cannabis which would depend on the kind of product being transferred. The state would charge $35 per ounce of cannabis flower or $13.50 per ounce of trim. Under the legislation, the state would also provide for a 3 percent local sales tax for cities and towns with a dispensary.

Some supporters of the legalization of cannabis want to see the revenues the state earns reinvested into communities most impacted by the war on drugs.

“So, if I were a person who sees this inevitable train moving through this legislature, I want to know where this money is going,” said Steven Hernandez, executive director of the Commission on Women, Children and Seniors, told the committee.

He said given the General Assembly’s penchant for sweeping funds, and moving money around to fill various gaps, he said the virtuous thing to do would be to earmark cannabis revenues for particular groups and communities.

“If this passes, what I say is everyone of you should focus on ensuring that this money goes toward purposes that either improves the lives of lives of people or remediate the losses people have experienced,” he said.

Republicans are expected to vote as a bloc against all measures relating to marijuana. Decriminalization and regulation measures have already passed other committees and Gov. Ned Lamont, a Democrat, has said that he supports legalization.

Rep. Rojas, who chairs the committee, said he’s not going to make any predictions about whether marijuana legalization will pass.

“I think most members want to see a complete package before they make a final determination as to how they’re going to vote,” he said.

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