Massachusetts could make $300M from marijuana tax by 2020

Lawmakers still haven't finalized how much pot will be taxed in the state

(AP Photo/Jim Mone,File)

NORTHAMPTON, Mass. (WWLP) – Recreational marijuana will not be legally sold in Massachusetts until July of 2018, but by 2020, the state could collect as much as $172-million each year just from sales taxes.

The Department of Revenue calculated this number, assuming marijuana is taxed a total of 12%, according to the ballot law voters approved in November. It adds a 3.75% excise tax to the state’s 6.25% sales tax, and another 2% cities and towns can add if they host a pot shop.

Those who support the ballot law caution lawmakers not to set the tax rate too high, or else it could drive some buyers to go to the black market.


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If the excise tax bumps up to 5%, the state could collect $11 million more. Lawmakers still haven’t finalized how much pot will be taxed in the state.

“I think that it’s a little high, comparing that to alcohol where it’s the same kind of deal,” said Rebecca Alexander from Windham, Connecticut. The tax on alcohol in Massachusetts is 6.25%.

Alexander suggests the tax money collected should go toward the state’s education system and local food banks, while Allison McDonald of Amherst suggests, “Healthcare, particularly with drug rehabilitation services and the like.”

If lawmakers stick with the total 12%, Massachusetts would have the lowest marijuana tax rate of any state that has legalized recreational marijuana, except for Maine, where the tax rate is 10%.

Washington has the highest tax at 37%. Colorado has a 29% tax on marijuana, followed by Alaska at 25%.