LOCAL NEWS
RETAIL REALITY CHECK
IN CONNECTICUT W
14
hile marijuana enthusiasts and social equity advocates are generally content with Connecticut’s new recreational pot law, those who were counting on Cannabis cash to bail out the state and local governments are suddenly less satisfied. A new estimate of potential tax revenue generated by Connecticut’s fledgling Cannabis industry pours cold water on the big money dreams of some supporters. The report, from the state’s nonpartisan fiscal office, estimates that legal weed will bring in approximately $73 million in tax revenue by the fifth year of sales. This is a major departure from previous estimates that had adultuse sales generating up to $180 million in taxes annually. Connecticut became the fifth state to pass an adult-use bill in 2021 – joining New Jersey, New York, New Mexico and Virginia – when Gov. Ned Lamont signed legalization legislation into law on June 22. As of July 1, 2021, it is legal to possess up to an ounce and a half of Cannabis in Connecticut. However, retail sales are not expected to begin until May 2022 at the earliest. Because of this delay, the new fiscal office estimate indicates that adult-use sales would bring in just $4.1 million in taxes for the fiscal year ending June 30, 2022. According to the estimate, the following year would bring in $26.3 million, the third year would generate $44.6 million, the fourth year would clear $71.2
million and the fifth year would see a total of $73.4 million in tax revenue. In that fifth year of sales, $55.2 million in revenue would go to the state, with approximately $18 million going to municipalities. Despite the lower-than-anticipated revenue estimates, Connecticut remains one of the more expensive adult-use states. Retail pot will be hit with the state’s standard sales tax, as well as a local tax levied by the town the dispensary is located in and, on top of that, an excise tax based on the potency of the pot. Ultimately, Cannabis products sold in Connecticut will be subject to a 20 percent tax. While that’s on par with some other states in the region – Massachusetts and Vermont levy similar taxes – it could make black market marijuana more attractive to consumers. When retail sales eventually begin and tax is collected, 60 percent of the revenue will go to social equity programs and reinvestment in communities disproportionately impacted by prohibition. Twenty-five percent is earmarked for a drug treatment/mental health fund and the remaining 15 percent will go toward funding the state’s legal pot program. Unfortunately, a number of towns are considering opting out of retail sales before they’ve even begun, with some local governments having already passed outright bans or moratoriums on applications for dispensary licenses.
DISPENSARY ORDERED
TO PAY WORKERS
LEAFMAGAZINES.COM
A
Massachusetts dispensary has been ordered to pay nearly $300,000 in restitution and penalties after the attorney general’s Fair Labor Division found that it failed to appropriately compensate 282 employees. According to an investigation by the state, Theory Wellness, Inc., which has locations in Chicopee, Bridgewater and Great Barrington, didn’t provide premium pay for its employees. State law requires certain retail businesses to pay 1.2 times the normal hourly rate when employees work on Sundays or certain holidays. In addition to the $300,000 settlement, the state issued a citation to the company’s CEO Brandon Pollock and its CFO Nicholas Friedman. While the premium pay requirement will end in 2023, it is currently in effect and the attorney general’s office is serious about enforcing it. The Fair Labor Division started investigating Theory Wellness after receiving a complaint in December 2020. Theory Wellness cooperated with the investigation and is now complying with the premium pay law. The company will also pay the wages owed to employees who weren’t correctly compensated. In a statement, Theory Wellness blamed “inadvertent payroll errors” for the missing money. “The complexities of a Cannabis company are vast with a litany of traditional business-related resources, such as mainstream payroll providers that handle setting up pay rates, unwilling to provide services due to our classification federally,” the statement read. “This audit has been an opportunity to correct our policies and reaffirm our commitment to our team members, who make Theory what it is today.” These kinds of growing pains can be expected as Cannabis continues to be embraced as a legitimate industry.
OCT. 2021
Photo by Karolina Grabowska
