Cannabis In Massachusetts Outraising Alcohol Taxes For The First Time

Adults in Massachusetts haven’t stopped drinking alcohol. In fact, consumption has remained relatively steady in recent years. But according to new data from state officials, Massachusetts’ legal cannabis industry is outpacing alcohol sales for the first time. And it’s doing so by a wide margin.

A report from WCVB-TV in Boston found the state has collected $74.2 million in cannabis excise taxes so far for Fiscal Year 2022 compared to just $51.3 million so far in alcohol taxes. Those figures represent the first six months of the fiscal year, through December 2021. The fiscal year concludes at the end of June 2022.

Adult-use cannabis sales carry a state-mandated 10.75 percent tax, plus an additional 6.25 in standard sales taxes. Towns and municipalities in Massachusetts are allowed to charge additional taxes of 3 percent.

Sales and tax revenue have boomed since voters in the Bay State passed Ballot Question 4 in 2016 and dispensaries first started selling the plant for recreational use on November 20, 2018. Massachusetts generated about $65 million in 2019 cannabis excise taxes and nearly $112 million in 2020.

Alcohol excise taxes have increased slightly in the past five fiscal years, which may contribute to growing tax revenues even if net sales haven’t necessarily jumped. Massachusetts taxes alcohol at varying rates depending on its strength and volume.

For example, taxes for wine are lower than a 40 percent alcohol-by-volume vodka, rum or whiskey. A new bill in the Massachusetts legislature, if passed, could double all alcohol excise taxes.

The state’s Cannabis Control Commission reported the average monthly cost per ounce of cannabis is the lowest it’s been since the beginning of the pandemic.

30-year-old Olivia Letters and her friends are among Massachusetts residents who have made the switch from alcohol to cannabis. Letters told WCVB-TV that her group of friends used to only enjoy drinks together. Now, they mostly smoke marijuana.

“In my circle, people drink less alcohol and smoke more weed,” she said from inside NETA cannabis store in the southwest Boston town of Brookline.

Adults across the United States have cited a variety of reasons for switching to cannabis instead of drinking alcohol. Among them include to save money, to avoid a hangover and nausea, to cut calories and to relax.