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Latest Bill Puts a Huge Tax on Marijuana

Latest Bill Puts a Huge Tax on Marijuana
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In a sweeping rewrite of the voter-passed marijuana legalization measure, House leaders will advance a bill Wednesday that would more than double the total tax on recreational pot and give municipal officials — instead of local voters — the power to ban cannabis shops and farms.

The legislation immediately faced blowback from advocates, who said “it insults voters,” and from elected officials, who said the bill would ensure that the illicit market would continue. But it drew praise from a key lobbyist for cities and towns, and the measure is far from the final step as legislators rewrite the law.

The House bill, scheduled for a Thursday vote, would raise the total recreational pot tax, now set at a maximum of 12 percent, to a mandatory 28 percent.
It would also consolidate oversight of the state’s medical and recreational marijuana programs in one agency, enshrine restrictions on pot-infused edibles in law, set sharp limits on marijuana advertising, and strip Treasurer Deborah B. Goldberg of her unilateral marijuana oversight authority. That’s according to an outline of the legislation and an interview with its author, Representative Mark J. Cusack, Democrat of Braintree.

Cusack said the bill respects the will of the voters while better protecting public health, public safety, and the best interests of the state.
“The voters voted to allow people 21 years of age and above to be able to access a regulated and safe marketplace. That is exactly what this bill does,” he said in his State House office. “The ballot question is fundamentally flawed.’’

The House bill, however, would not change some of the basics of legalization.
Adults 21 and older could still grow up to 12 marijuana plants per household. And they could still possess, use, and purchase the same limited amounts of marijuana.
Under the bill, retail stores would still be on track to open in July 2018.
But the tax on retail pot sales would be much higher — which fomented conflict Tuesday night on Beacon Hill.

The voter-passed initiative calls for a 3.75 percent state tax and a 2 percent local-option tax on pot sales, in addition to Massachusetts’ regular 6.25 percent sales tax. That’s 12 percent in total.

Under the House proposal, the total tax would be 28 percent. The math: a 6.25 percent sales tax, a 16.75 percent state pot tax, and a mandatory 5 percent local tax that would go into city and town coffers.
Outside lawyers said there may also be a hidden tax in the bill on wholesale transactions, but Cusack said that’s not the intent and the total tax rate will be capped at 28 percent.
Moreover, Cusack, House chairman of the Legislature’s marijuana policy committee, called it “a responsible tax rate,” in line with what other states levy, to fund regulation.
But Senator Patricia D. Jehlen, the other cochair of the marijuana committee, blasted the core of the House effort.
“This tax rate is directly contrary to the will of the voters and so is the lack of voter voice at the municipal level,” the Somerville Democrat told the Globe. “Both will preserve the illicit market.’’

Owners of medical dispensaries, many of whom plan to expand into the recreational market, also balked at the tax hike, saying that it would prompt consumers to continue buying marijuana on the black market, where it could be adulterated with other drugs or contaminated by mold.

Medical marijuana purchases would remain untaxed.

Current law says that if municipal officials want to stop a particular type of recreational establishment — for example, marijuana cultivation facilities — or all retail pot establishments, they must get voters’ approval. Local officials also need to hold a referendum if they want to sharply limit the number of marijuana shops in their jurisdictions.
Under the House bill, local elected officials would have the ability to unilaterally limit or ban marijuana retail stores, cultivation facilities, testing hubs, and manufacturing sites for marijuana-infused products.
That would surely give cities and towns more flexibility, but one of the key advocates who helped pass the ballot question criticized that proposal, saying it “insults voters” and would silence their voices.

“Its removal of ban authority from local voters will give a handful of selectmen the ability to overrule the opinion of their own constituents,” said Jim Borghesani, who managed communications for the ballot measure and who represents the national pro-legalization Marijuana Policy Project.

Geoffrey C. Beckwith, executive director of the Massachusetts Municipal Association, which represents cities and towns and opposed Question 4, which legalized pot, said the proposal was “real progress for communities” because it would give them more flexibility.

Current law says the state treasurer has sole authority to hire and fire a three-person Cannabis Control Commission.

The House bill would expand the commission to five people and put appointment power in the hands of other public officials, though the agency would remain housed in the treasurer’s office.
The treasurer would appoint one commissioner, as would the attorney general and the governor. The other two would be appointed by a majority vote of the three elected officials.

“It establishes a level of integrity to the commission that the ballot question lacked,” Cusack said, arguing that diffused responsibility would help insulate regulators from potential industry influence.
But a spokeswoman for Goldberg, the treasurer, had a more negative take.
“While we are still reviewing all the details of the bill, it is apparent that this structure does not provide operational authority or accountability within the treasurer’s office, which we believe is critical to have a safe, secure, and efficient implementation,” said Chandra Allard.

There were other voices of frustration Tuesday night.
Medical marijuana advocates were outraged by the House’s proposal to shift oversight of the medical cannabis program from the Department of Public Health to the Cannabis Control Commission, saying that would diminish the drug’s credibility as a medicine and increase the risk that a potential federal crackdown on recreational marijuana — threatened by the Trump administration — would also sweep up medical dispensaries and patients. Pot remains illegal under federal law.
“The Justice Department could, any day, decide they’re going to crack down on adult-use [recreational] marijuana,” said Michael Latulippe, development director at the Massachusetts Patient Advocacy Alliance, which backed the state’s 2012 ballot measure to legalize medical cannabis.
The House is poised to pass some version of this bill — a 48-page document — on Thursday, and then send it to the Senate.
Legislators hope to send a final measure to Governor Charlie Baker by month’s end.
Baker, a Republican, won office in 2014 pledging not to raise taxes. On Tuesday, through a spokesman, he remained circumspect about whether that pledge applies to marijuana as well as his position on the bill as a whole.

Information and Story Credit: By Joshua Miller at GLOBE STAFF- The Boston Globe

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