Massachusetts marijuana excise tax revenue exceeds alcohol for first time
Changing attitudes toward cannabis and alcohol helping drive increase in use
Changing attitudes toward cannabis and alcohol helping drive increase in use
Changing attitudes toward cannabis and alcohol helping drive increase in use
Maybe a generation ago, Olivia Letters and her friends would have had drinks together. Now, they mostly smoke pot.
"In my circle — I'm 30 — people drink less alcohol and smoke more weed, at least in Massachusetts," she said in an interview inside NETA's Brookline cannabis store.
If there's any doubt about weed's popularity, just hit the road — billboards are seemingly everywhere advertising recreational marijuana stores. The numbers back it up, too.
Since adult-use retailers opened in Massachusetts in November 2018, gross total sales have now reached $2.54 billion, according to data from the Cannabis Control Commission.
While tax data shows alcohol consumption is hardly plummeting, the meteoric rise in cannabis use speaks to changing attitudes about recreational alcohol and marijuana use.
"I think that people are looking for an alternative to make them feel better," said Mikayla Bell, community outreach manager for NETA, one of the largest cannabis retailers in the state. "Oftentimes people are turning to alcohol for relief. And now they found another product with without the hangover, without the calories."
Bell said the general public is becoming more comfortable with the idea of recreational marijuana, even if they're not using it themselves.
Data obtained by 5 Investigates reveals plenty of people are consuming it. Take excise taxes, which are levied on both alcohol and marijuana.
Alcohol excise taxes have increased slightly in the past five fiscal years. Halfway through the current fiscal year, Massachusetts has collected $51.3 million so far in alcohol excise taxes.
For the first time, marijuana excise taxes have exceeded alcohol's. At the same midway point this fiscal year, the state has collected $74.2 million as December 2021.
The excise tax of 10.75% on recreational cannabis is only about half of the total tax revenue being collected for cannabis. There is also a 6.25% state sales tax, plus a local tax of up to 3%. It all added up to $208 million in total tax revenue last fiscal year.
The transition from medical to recreational use typically leads to a doubling or even tripling of revenues "almost overnight," according to Vivien Azer, a senior Wall Street research analyst and managing director at Cowen who covers the emerging cannabis sector.
Azer pointed to Colorado, which was the first state to legalize adult-use marijuana, which has had "multi-year growth in terms of cannabis revenue generation."
Azer said the pandemic increased cannabis sales with people on lockdown and having more disposable income, but she said consumption trends have now started to normalize.
Azer also said shifting attitudes about cannabis use are helping drive growth.
"Not only is the industry growing by migrating current consumers out of the illicit market into the legal market. But you're also engaging consumers that have probably tried the product once in their lifetime, but then moved away from the category, but now have permission to reengage with the category now that it's legal," she said.