Adult-use cannabis sales in Massachusetts rose past the $10 billion mark in September, a major financial milestone for an industry that formed only a decade ago when voters legalized marijuana via a ballot initiative in 2016. The first adult-use dispensaries in the state opened in 2018.
The sales milestone reflects a demand for recreational cannabis that has steadily grown in the last 10 years. Marijuana retailers had their biggest single month ever this past June — which saw $156 million in total sales. The industry now averages around a billion dollars in sales each year.
Data from the Massachusetts Cannabis Control Commission (CCC) shows all-time cannabis sales have pulled in around $2 billion in state and local taxes. Marijuana is subject to the state's 6.25% sales tax, as well as a 10.75% excise tax. Cities and towns that host a cannabis business can also choose to impose a 3% local tax.
"I see this as a continued projection of where the industry is going," said CCC Commissioner Xiomara Alban DeLobato. "We've seen steady growth overall and I anticipate that continuing to happen."
DeLobato says the demand will help inform the Commission's work as the state prepares to enter the next chapter in legal weed: social consumption sites, where customers will be able to purchase cannabis and consume it on location. The CCC laid out regulations for the so-called weed cafes at the start of this year.
"There's innovation that's still untapped, you know, in the industry as a whole," DeLobato said. "So I only can see just a lot more positive growth from here."
DeLobato anticipates the first social consumption licenses will roll out by the beginning of 2027, and will encompass pre-existing dispensaries that want to add social consumption to their stores. Two other licenses types still being drafted will allow for cannabis to be consumed at eligible events and festivals, and for non-marijuana businesses to partner with a cannabis retailer to offer social consumption.
Even after the first licenses roll out, DeLobato said it's likely there will be extra lag time as dispensaries have to physically build out social consumption locations at their business. She said those type of construction projects can take longer for cannabis sellers, as the substance's illegality at the federal level prevents business owners from pursuing traditional financing.
"If you're a developer, you're a homeowner who added some construction to their new house, it can take months, right?" DeLobato said. "And all of our businesses, they don't have access to regular capital. They cannot go to the bank and get a business loan. They cannot get a business line of credit."
The state's cannabis industry is preparing for this next frontier as it faces headwinds in the form of a ballot question to end recreational marijuana. Voters will decide in November whether to repeal laws that allow cannabis to be sold and taxed. That measure would also make possession of more than an ounce of marijuana a civil offense for adults. Proponents of the ballot question say they're concerned about the health impacts of cannabis, the potential for impaired driving, and risk to children.
DeLobato said she understands the concerns of those opposed to the state's cannabis industry, but that she believes the strict regulations Massachusetts has placed on sellers provides a strong safety net for residents.
"I definitely can understand why certain communities or people may be skeptical and just feel a little bit resistant to the industry, and I think that's anyone's given right." DeLobato said. "For anyone who is really nervous or just opposed to the industry as a whole. I would definitely encourage them to just test out a site, go to a dispensary."
DeLobato said legalization has helped the state keep an eye on the quality of cannabis that moves through Massachusetts, and that having a regulated, legal product allows for inspections and oversight on a substance that would otherwise move through illicit channels.
"I'm so thankful that Massachusetts has a heavily regulated industry because we know the products are safe," DeLobato said. "If we didn't have a heavily regulated industry, our products would very likely not be as safe."
If that ballot question passes, Massachusetts multi-billion dollar cannabis industry would functionally cease to exist. A UMass/WCVB poll from August found that amongst the nine ballot questions going before voters, the marijuana ballot question has some of the least support. 15% of respondents said they would "definitely" vote yes, while 40% said they would "definitely" vote no.
