City of Cambridge Eliminates Local Tax on Recreational Cannabis

The Harvard Crimson..

The Cambridge City Council unanimously passed a policy order repealing a three percent “Community Impact Fee” tax on recreational marijuana in a meeting Monday evening.

The policy order eliminated the tax, currently part of Massachusetts state law, in a move to “support the viability” of recreational dispensaries in Cambridge, according to an early version of the policy order.

Though Massachusetts legalized recreational marijuana in 2016 and Cambridge began issuing permits for recreational dispensaries in 2019, retail weed shops have been slow to open. The city’s first recreational dispensary, Yamba Market, will open to the public next week.

Sean D. Hope, a co-owner of Yamba Market, said that dispensaries are “not set up to be profitable” under the existing tax regime.

“[Taxing] 3 percent of gross in a startup business is unheard of, especially when it’s a business that the city is trying to incentivize to be in Cambridge,” Hope said.

In addition to the community impact fee, sales of marijuana are subject to a 10.75 percent excise tax and a 6.25 percent state sales tax.

Under the current law, the community impact fee compensates the city for “additional expenses and impacts” on municipal services such as law enforcement and public health.

The policy order, however, argues that evidence from Northampton, Mass. suggests the repeal of the tax “would not have any appreciable impacts” on Cambridge finances.

Northampton waived its own community impact fees for recreational dispensaries in January.

Read more. https://www.thecrimson.com/article/2022/3/23/cambridge-eliminate-weed-tax/

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