Can Maine’s recreational and medical marijuana community withstand the taxation in its future?

 

Maine legislature met at the state house this past Wednesday, June 12th, 2017 to discuss Maine’s marijuana sales tax. The most notable fact taken from the Committee On Marijuana Legalization Implementation was the possible rate of this tax on marijuana. 10% tax on marijuana sales would be the minimum. Falmouth Democrat on the Marijuana Legalization Implementation Committee, Rep. Teresa Pierce said we would more likely see a 20% – 25% tax. While Maine’s normal sales tax rate is at 5.5%. Maine’s current sales tax ranks us 10th in the nation for highest taxes! Note that Maine has a much smaller population than 40 other U.S. states.

 

Where did they come up with 20% – 25% tax on marijuana?

  • At most wine has a total of 12.5% sales tax (5.5% sales tax + 7% excise tax).
  • Gas also has a higher tax. State and federal excise taxes amount to about 13% of the cost of a gallon of gas.
  • Maine Smoking Tobacco/Cigars Tax does come in at 20% excise tax.

As a result, this could explain where they got the tax rate number from. The sad part is it’s clear the committee is looking at cannabis as a smoking product rather than a medicinal herb. Yet Colorado successfully started out with a 10% tax on marijuana. As of July 1st, Colorado approved a new 15% tax on marijuana.

So let’s make this realistic, It’s likely an 1/8 bag of flower is going to increase by $5 – $10 dollars if this sales tax were approved. One of the biggest concerns with a high tax rate is the likeliness of it driving folks back to the “black market”. Any sort of tax on marijuana has the potential to drive buyers back to the “black market”. However, the November vote says Mainer’s are FOR legalized and regulated marijuana. Which means there HAS to be a tax.

How would this really benefit Maine? Where are the extra tax funds going?

At this point, we can only hope tax on marijuana will not be too high and that the funds go to something beneficial for Mainer’s. The common structure is that the millions of extra dollars collected will be put into a general pooled fund. Law makers will decide from there where it should go. Roads, schools, or the fight against the opioid epidemic? There are plenty of worthy groups that could use the money. We’ll see how the government decides to spend its new found income.

Stay updated on marijuana news with MainelyMedicated

 

Sources:

https://www.colorado.gov/pacific/tax/marijuana-taxes-file

http://www.pressherald.com/2017/07/12/lawmakers-seek-tax-on-pot-that-raises-revenues-but-discourages-black-market-sales/

https://www.salestaxhandbook.com/maine

http://www.sunjournal.com/news/maine/0001/11/30/maine-legislators-ponder-taxes-legal-marijuana/2165030

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