A year in, revenue from marijuana retailers stays high

  • Northampton Mayor David Narkewicz, right, attends a celebration at NETA’s Northampton location marking one year of recreational marijuana sales. Contributed Photo

Staff Writer
Published: 11/21/2019 11:26:47 PM
Modified: 11/21/2019 11:26:36 PM

NORTHAMPTON — Northampton helped make history on Nov. 20, 2018, by being among the first two communities east of the Mississippi to see legal recreational marijuana sales.

One year later, recreational marijuana is being sold around the commonwealth in 33 establishments, including in the nearby communities of Easthampton and Amherst. But even with just New England Treatment Access currently open for business, Northampton continues to pull in big revenues, totaling approximately $2.85 million.

Mayor David Narkewicz said he’s proud of the leadership role that the city has taken on marijuana, while also noting that there have been some issues with traffic and parking.

“Having too many visitors come to your city is not usually a bad thing for most people,” he said.

But not everyone is pleased with the city’s direction on marijuana, with complaints about NETA’s impact on neighborhood parking being prominent. Some residents have also called for a cap on the number of retail marijuana establishments in the city. Currently, there is no cap.

In addition to its agreement with NETA, the city has signed 10 additional host community agreements with other recreational marijuana retailers.

Every sale of recreational marijuana products at NETA is subject to a 3 percent excise tax, as well as a 3 percent community impact fee. So far, three calendar quarters of revenue have been released to the city, with the last tax payment coming in on Sept. 30. At $535,085, it represents tax revenue from May, June and July. The $530,599 in community impact fee money released to Northampton around this time represents money collected from sales in April, May and June.

The second round of funds came to $530,589 in excise tax and $520,728 in community impact fee money, while the first round amounted to $449,825 in tax and $287,506 in community impact fee money.

The tax collections indicate that NETA recorded $50.5 million in gross recreational sales from November 2018 through July of this year.

The next disbursement from the state is set to take place around Dec. 31, the end of the current fiscal quarter.

The Sept. 30 revenue represents the second full three months of revenue that the city has seen. The mayor noted that the revenue has remained stable, but he said that the low number of recreational marijuana retailers in the state still raises a question of whether it can continue.

The disbursement is also the first that can be used as part of the city’s current fiscal year budget: $1.2 million in recreational marijuana revenue was built into the budget this year.

The community impact fee money must be used on items that offset NETA’s impact on the city.

Easthampton

Easthampton, which saw recreational marijuana sales begin in December at the INSA dispensary, reports a total of $410,606 in excise tax revenue. It has not yet received any community impact fee money from sales, as its host community agreement with INSA states that INSA will make its first payment on the last day of the first year of recreational sales. Aside from INSA, Easthampton has signed host community agreements with four other recreational marijuana retailers.

Amherst

Amherst saw recreational marijuana sales begin in May at Rise Amherst. Since that time, $38,017 in excise tax has been delivered to the town as has $77,886 in community impact fee money, which it receives on a quarterly basis. Amherst also receives community impact fee money from medical marijuana sales. Like Easthampton, Amherst has signed five retail recreational marijuana host community agreements.

On Wednesday, the Cannabis Control Commission announced that the commonwealth has seen $393.7 million in gross recreational marijuana sales since legalization.

“Marijuana retailers and consumers should be commended for participating in an extremely smooth rollout of the legal adult-use cannabis industry in Massachusetts for the first year,” commission Chairman Steven J. Hoffman said in a release. “Hundreds of millions of dollars in sales are one measure of success, but I am even prouder of the way in which marijuana establishments have worked with the commission to gain and preserve compliance with our regulations and patrons continue to inform themselves about the law and their responsibilities when they visit Massachusetts stores.”

Narkewicz and Greater Northampton Chamber of Commerce Executive Director Vince Jackson stopped by NETA on Tuesday for a small celebration that featured a cake.

“Our business has really been able to thrive here,” said Amanda Rositano, president of NETA.

Rositano said recreational marijuana has expanded the number of people who can benefit from cannabis, saying that many recreational customers are having conversations similar to those of registered medical patients.

“For some, that has meant now they can access cannabis,” she said.

NETA, INSA and Rise Amherst all first opened as medical marijuana dispensaries, and all have continued the medical side of their business as well.

Rositano said that while NETA encourages people to use the medical program, some have not taken advantage of it because of privacy concerns, or because they are too sick to register.

She also emphasized that NETA will continue its commitment to its registered medical patients, saying that they don’t have to wait in line; the company has also reserved inventories and service stations for them.

“Our registered medical patients are our priority,” Rositano said.

Bera Dunau can be reached at bdunau@gazettenet.com.




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