Changing the way Massachusetts taxes legal marijuana could produce more revenue for the state, but it could also disrupt the fledgling cannabis industry, a report found.
In a report by the Cannabis Control Commission, regulators and state revenue experts considered taxing pot based on its weight or potency, rather than the current price-based tax. Although almost every single alternate tax structure studied in an analysis conducted by KPMG is likely to generate more tax revenue, the CCC determined the relatively small increases would not be worth the hassle.
“The Massachusetts adult-use cannabis industry is in a nascent stage. A large-scale change in taxation scheme would cause disruptions that are not worth the potential short-term revenue gain, especially in a market with currently stable prices and inelasticity,” the agency wrote in a report that commissioners are expected to submit to the Legislature.