Lawmakers Find Common Ground On Marijuana Tax

BOSTON (CBS) - After weeks of private negotiations, Beacon Hill lawmakers struck a deal on proposed changes to the state's recreational marijuana law Monday afternoon. The biggest sticking point was the tax rate on retail pot.

The House and Senate compromise proposes a maximum 20% tax on the sale of recreational marijuana (10.75% excise tax, 6.25% state sales tax, and an optional 3% local tax). Massachusetts voters approved up to a 12% tax rate on retail pot in November.

"The most important thing for us is to roll this market out, so a little bit higher tax rate will help us do that," said state Senator William Brownsberger (D-Belmont).

Somerville state Senator Patricia Jehlen told WBZ's Tiffany Chan that, "It's exactly the same as Oregon, which is perceived as one the most successful state in rolling out this market."

Governor Charlie Baker indicated his support for the increased tax rate, but said he had yet to see the compromise bill as of Monday afternoon.

"Sounds like it would be among the lowest tax rates for marijuana in the country, but if it's what it takes to cover the cost of administrating and managing the program – that would be fine with us," said Governor Baker.

The ballot law allows adults ages 21 and up to use, grow and possess recreational marijuana in Massachusetts. Some supporters of legalized marijuana are worried that a higher tax rate could turn many buyers to the black market.

"Our concerns all along is that we want the tax rate to be set right that would fund the initiative and the administration of the initiative, but keep taxes low enough that it doesn't give drug dealers the incentive to continue sales," said Jim Borghesani of the Yes on 4 Coalition.

Under the compromise, cities and towns that voted against recreational marijuana ballot question will be able to ban pot shops through a vote by local legislative body.
Communities that supported legalized marijuana will be able to block pot shops through a city-wide referendum.

The Massachusetts House and Senate could send a final bill to Governor Charlie Baker by the end of the week.