Town of Lee sees its first windfall from cannabis revenue, as Canna Provisions writes a check
Lee — It’s not clear what the long-term implications are, but at least in the short term, towns in southern Berkshire County that host retail cannabis facilities are seeing a windfall of cash from taxes and fees paid by the owners of those businesses.
Since Theory Wellness, the county’s first recreational marijuana store, opened in January, the town of Great Barrington has netted roughly $1 million in combined taxes and fees as of the beginning of July.
Canna Provisions, which opened in Lee at 220 Housatonic St. on July 5, has made its inaugural payment to the town after closing out its first quarter of business. The company says it will pay a community impact fee of $109,942 to the town of Lee as part of a previously negotiated host community agreement. The impact fee is typically equal to 3% of gross sales each quarter.
If it is negotiated as part of the host community agreement, municipalities that host cannabis stores also receive a 3% local-option sales tax on all sales from dispensaries within their boundaries. Those payments are returned to the towns from the state Department of Revenue on a quarterly basis.
Canna Provisions’ first quarterly tax payment was received last month and added an additional $28,369.62 to the town’s coffers, Canna Provisions said in a news release.
Quarterly taxes were generated from June to August, and since Canna Provisions opened in July, this represents just over a month of taxable earnings. Subsequent tax payments, Canna said, “are expected to be even higher.”
The two payments, totaling nearly $140,000 for the first three months of business, “represent a significant sum to the town, which has an annual operating budget of just $25 million,” Canna said.
In an interview, Canna owners Erik Williams and Meg Sanders said it has been a happy marriage with the town of Lee. The permitting process was fair and officials were eager to help Canna succeed.
“I am excited to see the success of this new business in our community, and incredibly optimistic about all of the good things we will be able to do in the town with this new revenue stream,” said Selectman Tom Wickham. “Canna Provisions is on pace to be one of the largest employers and taxpayers in our town, and their contributions to our economy are going to go a long way toward helping this town be all that it can be.”
“We had intended to hug Lee really hard, but we didn’t expect them hug us back as hard,” Sanders quipped.
Sanders said, since its legalization in 2016, cannabis has been an economic driver across the state. The Canna Provisions store in Lee has already supported the economy, she said, including providing 45 people with jobs, working with local vendors and bringing in tourism. Williams said 40 of those jobs are full-time.
Entry-level employees start at $16 per hour and it is expected that most will advance to $18 per hour after a 90-day probationary period, at which point health and dental benefits are also offered. Managers, Sanders has said, make $55,000 per year and higher. All are Metrc certified.
Also in the planning stages is a second store in Holyoke that the company aims to open before the end of the year. The store will be located in the former Hampden Paper Company mill complex. In addition, construction will begin soon on a Canna grow facility at the Quarry Hill business park in Lee, with the goal of being fully operational by next summer.
There are three other cultivation applications on file in Lee: one on Route 102, one at the old Greylock Mill and a second at Quarry Hill. The town will allow 14 licenses: two for retail and 12 for cultivation.
Williams said Canna has had to cease the sale of cannabis concentrate and vaping accessories because of Gov. Charlie Baker’s recently announced four-month statewide ban on both cannabis and tobacco vaping products.
Williams emphasized that almost all of the lung-related illnesses reported as a result of cannabis vaping are from products bought on the black market. He noted that black-market producers often use pesticides at their grow facilities, so the black-market concentrate produced for vaping also contains concentrated chemicals used to control insects. In contrast, the use of pesticides in legal state-licensed grow facilities is prohibited by the state Cannabis Control Commission.
Canna Provisions is just off Exit 2 of the Mass Pike. It is the only other recreational 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.
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.