Great Barrington — Talk about a windfall. Great Barrington’s take, through taxes, of its share of recreational marijuana sales in town since the beginning of the year is roughly $1 million.
Theory Wellness, the town’s only retail cannabis shop, reported second-quarter gross sales of a little more than $10.3 million. Nick Friedman, Theory’s co-founder and chief financial officer, told the selectboard in a July 5 email that Theory would mail a check to the town for $309,217.62, fulfilling its obligation to pay a community impact fee to the town of 3 percent of its sales, as the company agreed to do in a previously negotiated host community agreement.
In addition, the town has exercised its option to impose a 3 percent local sales tax, on top of state excise and sales taxes. That effectively doubles the town’s revenue share to almost $620,000 from April 1 to June 30. But that local-option sales tax is collected by the state and sent back to the towns, just as the local-option meals tax is, so it’s unlikely Great Barrington will see that money anytime soon.
In the first quarter, from Jan. 1 to March 31, Theory’s total sales were in the neighborhood of $7 million. The combined local-option sales tax and community impact fee payments to the town were more than $370,000, putting Great Barrington’s total revenues through the end of June at just shy of $1 million.
The take might have been more from January through the end of March, but Theory did not receive clearance from the state Cannabis Control Commission to open until Jan. 11. So even with 10 days missing, sales were robust for the first quarter.
At Monday’s selectboard meeting, member Kate Burke noted that the money cannot be spent yet because it was not budgeted for. The disposition of the funds will be discussed during budget deliberations this fall.
Selectman Ed Abrahams said he would like to explore exactly what the community impact of a retail cannabis store is. Revenues for the community impact fee must be spent on addressing the impact of the stores on the community, while revenues from the local-option sales tax can be spent anyway the town wishes. Or, Abrahams quickly added, all or part of the money could remain unspent in order to reduce the tax burden.
“What we will start doing soon is trying to define what ‘community impact’ means,” Abrahams said. “Areas where we might want to spend it, decisions on how much to spend in different areas, will have to happen in the budget process.”
In a follow-up interview, Abrahams said there are obvious ways in which cannabis stores impact the community: Town Hall staff time, police training, parking and traffic. His question is how much to spend on any given cause.
Abrahams said he has heard from some constituents that their children are under the mistaken impression that cannabis is good for them because so many of the names of the shops include words like “wellness,” “remedies,” “natural” and “healing.”
“That tells me we need an education program,” Abrahams said.
On the other hand, the sales tax revenue returned to the town by the state is unrestricted. But Abrahams cautioned against starting new programs because the money could dry up some day.
The $1 million in cannabis revenue for half a year is no drop in the bucket, even for a town with an annual budget of about $28 million, a figure that includes Great Barrington’s contribution to the Berkshire Hills Regional School District.
“We need to look at this as temporary,” Abrahams said. “We’ve got competition coming from New York and Connecticut and now Lee. This won’t last forever. Someday we’ll stop seeing this, so I hesitate to create new programs.”
Canna Provisions, a retail cannabis store in Lee just off Exit 2 of the Mass Pike, opened on Friday. It is the only other store in South County, aside from Theory, which began sales in January after having already established itself as a medical marijuana dispensary in 2017.
In addition, Silver Therapeutics in Williamstown, and Berkshire Roots and Temescal Wellness, both in Pittsfield, have opened their doors recently. Click here for a handy guide to the stores that have opened in the Bay State as of late last week.
In New York, Gov. Andrew Cuomo pushed this year to legalize recreational cannabis but did not receive sufficient support in the state legislature. As a compromise, possession of the substance was decriminalized. Meanwhile, as the New York Daily News has reported, New Yorkers continue to flock to Theory.
Crain’s New York, which featured Great Barrington and Theory in a recent story, has estimated that as much as 50 percent of adult-use sales in Massachusetts come from the state of New York. In Connecticut, a drive to legalize adult use this year failed in the legislature. Large numbers of vehicles with Connecticut plates can also be seen in the Theory parking lot. Both states legalized medical marijuana a few years ago.
Since the first two adult-use stores opened the week of Thanksgiving 2018 in Northampton and Leicester, statewide recreational aggregate sales through the last week of May were almost $140 million, according to Marijuana Business Daily. This number will surely decrease as more nearby states legalize the product, as analysts predict they will.
The city of Northampton, home of NETA, one of the first adult-use stores to open in the state, received more than $737,000 in revenues in April, though officials cautioned that those high numbers will slacken as more stores open across the state. Those revenues only included sales from December and January, as well as the 11 days the store was open in November.
“These numbers are a reflection of the hard work from the Theory team, not just in Great Barrington, but from the entire organization,” Theory CEO Brandon Pollock told The Edge. In addition to its Great Barrington store, Theory also owns a medical marijuana dispensary and a cultivation facility, both in Bridgewater.
“We’ve learned a lot in the past six months and want to continually improve across all areas from cultivation to production to retail,” Pollock continued. “Of course, none of this would be possible without the support of the wonderful customers who visit and our fantastic retail staff in Great Barrington who make it all happen. We look forward to what’s to come in the future.”
In addition to Theory, there are four other cannabis stores planned for Great Barrington that are in the licensing stage with the state Cannabis Control Commission: Community Growth Partners, which plans to open a retail cannabis operation at 783 South Main St.; HighMinded LLC is in the licensing stage to open a store at 126 Main St.; two brothers from Connecticut plan to open a shop at 82 Railroad St., a former commercial kitchen; and Calyx Berkshire Dispensary wants to open its first recreational store in downtown Great Barrington in the former Joe Dagget storefront at 307 Main St. There is also a new retail establishment and grow facility opening soon in nearby Sheffield.
The selectboard has indicated it wants to explore whether to restrict further cannabis development in town after voters at the annual town meeting in May overwhelmingly approved an advisory resolution that the board look into placing a limit on the number of such establishments. The selectboard has agreed to schedule a public forum. The planning board is currently examining the issue and has placed it on the agenda for Thursday’s meeting.
The cultivation, sale and use of recreational cannabis-related products was legalized in Massachusetts through a 2016 ballot initiative. The measure passed by almost 7.5 percentage points statewide, by almost 30 points in Great Barrington and by almost 24 points in Sheffield. Implementation of the new law was left to the hastily created state Cannabis Control Commission. Preceding that law, medical marijuana was legalized in Massachusetts in 2012 through the same process.