Last November, Massachusetts legalized recreational marijuana. In the year since, this budding industry has had to face a slew of different challenges, obstacles and naysayers. With the first dispensary set to open in July, the state is still in the process of figuring out how this new industry will look once it starts to be implemented.
Unsurprisingly, one of the hottest topics in this new debate has been taxes. After all, it’s not every day that a $2 billion dollar industry emerges in your state. Massachusetts has already imposed a 10.75 percent excise tax on recreational marijuana on top of the state’s existing 6.25 percent sale tax — but cities are also allowed to tack on their own taxes, up to three additional percent.
The Boston City Council is considering making this move, and this week, Mayor Martin Walsh wrote a letter to the Council urging them to take full advantage of the tax. An article in the Boston Herald on Wednesday reported that Walsh’s administration thinks even that extra three percent would not be enough.
All these taxes might sound like a lot, but even with the additional three percent, we would still have one of the lowest rates in the country. In states with more established recreational marijuana industries like Colorado, Washington and Oregon, pot taxes are all at least 20 percent. In Washington, they are actually substantially higher than that, at an astounding 37 percent. In comparison to these figures, it almost seems silly that the question of whether to implement a three percent increase in Boston’s marijuana taxes would be so controversial.
Boston should absolutely implement this tax. Launching an industry of this proportion will undoubtedly come with some costs — probably in the form of things like extra policing and regulations. Some of that will be handled on the state level, but some of it could really benefit from Boston-specific measures, and this tax would help to cover those costs. The extra regulations and policing that might be necessary in this new sector would pay for themselves with this kind of tax, and that could make a huge difference in making sure everything goes smoothly in this time of massive transition for our city.
All of the ins and outs of the industry are largely unknown to us right now. We’re just not sure yet exactly what kind of resources it will take to implement all of this. What we do know, though, is that all of it will take money. We want to build an industry that is sustainable, an industry that has lasting-power — and that means we have to put some money into it first. This tax is the perfect way to do that.
As recreational marijuana continues to grow throughout Massachusetts, it’s very probable that the industry’s costs will go down and it will become even easier to regulate — and as more dispensaries are launched, its profits will go up. Soon, these taxes wouldn’t only be going toward maintenance and repairs of the pot-industry itself, they could start to be put towards Boston as a whole. If we reached a point in the marijuana industry where its sales were helping to finance things like education and housing and transportation in the city — it would be well worth our while.
People don’t like higher taxes, no matter what is being taxed or where those taxes might be going. But marijuana is one of the things that can still be taxed at relatively high rates while incurring relatively little opposition. That’s something we should be capitalizing on.
But if we were to raise taxes too high, we would be facing the risk that people would turn to the black market to get their marijuana for a lower price. However, this moderate tax increase would not be making legal marijuana unaffordable by any means. Black market marijuana wouldn’t stand a chance when compared to the safety, convenience and legality of the legal sector.
We can even look to other states to see how this might play out. In Colorado and Washington — two of the states with the biggest recreational marijuana sales — we have seen significant decreases in the black market popularity of marijuana since the drug was legalized.
All in all, raising taxes on recreational marijuana by three percent would hardly make a dent in the industry’s sales, and it would bring some pretty important benefits too.
The people have spoken. Recreational marijuana has been legalized in Massachusetts. And now, it’s time to put that into action. If we want to create the most effective and productive industry that we can in Boston, a three percent tax needs to be a part of that.