If the state adopts the tax on marijuana proposed by legislation released by the House this week, Massachusetts would charge the second highest tax of the eight states that have legalized the herb.
A bill favored by House leaders and adopted by the Legislature's Marijuana Policy Committee Wednesday established the tax on recreational marijuana sales at 28 percent. The bill is being reworked before a House vote, but the 28 percent rate stands a likelihood of surviving a redrafted.
That rate would land Massachusetts between Colorado's 25 percent tax and Washington's 37 percent rate. The Massachusetts current law, passed by voters last November through a ballot question, would apply an effective tax of 12 percent to cannabis products, which would be one of the lowest rates in the nation. Lawmakers have worked since the law's passage to rewrite the statute to raise more revenue to pay for education, regulation and enforcement.
If the House is aiming for a high tax, the Senate shows signs of wanting to adopt a much lower tax. Sen. Patricia Jehlen, the co-chair of the Marijuana committee, said the House's 28 percent rate "directly assaults the will of the voters and is a prescription for increasing the illicit market." Jehlen fears that a high tax will help perpetuate a black market with cheaper, albeit illegal, prices.
"I don't have a specific number. The key consideration is make sure you don't feed the black market," Senate President Stan Rosenberg told reporters Thursday.
"There are people who want us to do nothing at all and there are people who want us to do everything all at the same time. We have to be somewhere between the two," Rosenberg said.
A compromise tax plan worked our between the two branches could result in a tax rate somewhere in the middle of the pack, between Colorado's 25 percent and Oregon's 17 percent.
Part of the successful Yes-on-4 campaign that legalized cannabis called for marijuana to be taxed like alcohol, but the structure put forward in the House is more similar to the way tobacco is taxed.
In Massachusetts, cigars and smoking tobacco are taxed 40 percent of the price paid by the licensed seller at the wholesale level.
Cigarettes are taxed more like alcohol, at $3.51 per 20-count retail package.
Smokeless tobacco, a substance public health advocates on Beacon Hill have been trying to force into extinction, is taxed at a whopping 210 percent of the wholesale price.
Massachusetts taxes different alcoholic beverages at different rates. For you prosecco-lovers, the state charges $0.70 per gallon for sparkling wine, or about $0.14 for a 750 milliliter bottle. For the non-carbonated wine drinkers, the tax is just $0.55 a gallon, or roughly $0.11 per bottle. Beer will cost you $1.10 per gallon, about $0.10 for a 12 ounce can. If liquor is more your style, you're paying $4.05 per gallon, or about $0.05 for a standard shot.
Whatever tax is adopted this year, lawmakers will continue to review their options when pot goes on sale at retail shops next year.