Recreational Cannabis Bill Debate Picks Up in Massachusetts

A special recreational cannabis committee in Massachusetts began talks again on Monday (July 10), following a halt on the discussion regarding the debate of tax as members of the group intend to find common ground and introduce a revised bill.
Debate sparked between the House and Senate leaders, not due to the intended legal nature of cannabis in the state but about the taxing system set to follow the consumption.
The original bill, approved by voters last year, indicated a 10 percent tax on adult-use of cannabis in the state, however a newly passed bill by the House increased the tax to 28 percent. Now it’s up to a special six-member committee to find common ground with this bill.

Recreational cannabis support group hopes new bill includes “only minor changes”

Talks had been delayed and a self-imposed June 30 deadline wasn’t met due to House Speaker Robert DeLeo breaking discussion on the bill, until a state budget was approved and sent to state Gov. Charlie Baker.
According to a report from the AP, Sen. William Brownsberger, a member of this cannabis bill committee, warned about making any predictions on the results from these renewed talks.

The House voted to repeal the law and replace it with a bill that called for raising the tax on legal cannabis sales from 12 to 28 percent and giving local governing bodies such as city councils and select boards more power to prohibit or restrict the opening of retail marijuana stores.
The Senate’s more narrowly focused bill keeps the voter-approved law in effect and calls for no changes in the tax rate or municipal control.

Jim Borghesani, communications director with Yes on 4, a pro-cannabis group that worked on campaigning the cannabis bill during the leadup to the election last year, said the group continues to support the law “passed by voters” with no changes to it.
“We have no insight into the negotiations underway between the House and the Senate, but we hope that whatever bill emerges—if a bill emerges—includes only minor changes to the law passed by voters,” Borghesani told The Investing News Network (INN) in an email.

Investor Takeaway

A report found the proposed tax on recreational cannabis could hinder it becoming more common than the illegal product.
Peter Schwartz, a consultant for Anderson Economic Group, told Marijuana Business Daily the recently proposed 28 percent tax could “short-term boost” to the black market, as occasional consumers wouldn’t be compelled to make the switch.
However,  other states with higher tax rates– like Washington and Colorado– have seen consumption continue strong.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.