Easthampton nets $163K in tax revenue from quarterly pot sales 

  • The line of patrons at INSA one hour after the Easthampton establishment began its first day of recreational sales of marijuana on Saturday, Dec. 22, 2018. GAZETTE FILE PHOTO

Staff Writer
Published: 6/25/2019 11:30:28 PM

EASTHAMPTON — Tax revenue from the city’s recreational marijuana store has totaled more than $160,000 in the past three months.

Easthampton received $163,131.47 from INSA in local tax revenue for the months of March, April and May. The figure is almost three times the first payment of $58,438.13 the city received from the last week of December, January and February.

Mayor Nicole LaChapelle said Tuesday that although the latest revenue numbers are promising, the city is still uncertain about how much it should expect per quarter. INSA is the only marijuana store currently operating in the city and opened in December.

“It’s a substantial amount of sales,” LaChapelle said. “I’m more curious as to what the baseline would be, what is the top off. It’s still a guessing game.”

“We didn’t have a hard projection for this dispensary, or the city,” she added.

LaChapelle said the difficulty around forecasting tax revenue was due to certain local, state and federal variables. The number of dispensaries in a certain area, state regulations and the federal illegality of marijuana are all considerations, she said.

Tax revenue for the city comes from a 3-percent local tax on all gross marijuana sales, and the state receives an additional 17 percent from a state sales tax of 6.25 percent and a 10.75 percent excise tax.

Due to the terms of the town’s five-year host community agreement with INSA, the business is also required to pay the city three percent of its gross sales at the end of every year. INSA’s first annual payment should clear in early 2020, LaChapelle said.

Funds acquired by the city from local taxes go immediately into a general fund which then gets dispersed on an at-need basis, LaChapelle said. Officials then meet weekly to look at the budget and expenditures to see where the money could be used, she said.

LaChapelle said that the tax revenue from INSA comes at a time where the city is “at the state’s mercy” regarding education funding and Chapter 90 highway money.

“The funding formula has been going down because we’re not an urban center,” she said.

In place of state money, LaChapelle said the city is looking to use marijuana tax revenue for road repairs and stormwater management.

“Any dollar is a good dollar,” LaChapelle said.

LaChapelle said that city officials are considering supporting what she described as social consumption sites for future marijuana revenues. The mayor also explained the city is continually focused on advocating for social equity practices in the marijuana industry.

Though INSA is currently the only operating recreational marijuana dispensary, the city has inked host community agreements with four other businesses: The Verb is Herb, Herbology, Holistic Industries and Green Life Dispensary.

All businesses looking to sell recreational marijuana must sign a host community agreement with their respective municipalities and be cleared by the state Cannabis Control Commission before opening.

The city of Northampton is expected to receive its second quarterly tax disbursement from marijuana sales in that city at the end of June.

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