Legal Marijuana & OPEB in Massachusetts

Legalized Marijuana is subject to state taxes and can help Massachusetts decrease its OPEB liability by increasing its OPEB Trust savings.

Legal retail sale of marijuana in Massachusetts is fast approaching and many towns are reviewing whether or not to have a local store. Regardless of your personal views on the legalization, this presents a unique opportunity to help with your OPEB costs. In addition to the sales and state excise taxes, cities and towns will be able to impose a tax of up to 3% of gross sales on any retail marijuana shops.

Has your town has been struggling to meet your OPEB funding obligations? You’re not alone and this 3% tax could be a consistent, low-effort way to fund. According to New Frontier Data, gross sales of legal marijuana in Massachusetts are expected to be $450 million in 2018, generating approximately $90 million in taxes. This figure is expected to grow substantially in the coming years – up to $1.2 billion in sales by 2021! Now your town would only see a small chunk of that, but it is a sizeable amount of new tax revenue. If you have other things you planned on putting this revenue towards like schools or infrastructure, consider dedicating a small amount to your OPEB fund. Even just 0.5% would make a difference and would reduce future strain on your taxpayers.

OPEB funding is a major concern in many towns across the state and it can be a hard sell to taxpayers. They’d much rather see their tax money go to current costs & that’s understandable. If your town decides to allow retail marijuana – embrace it and fund your OPEB obligations.

As always, if you have any questions on funding your town’s OPEB obligations, we’re here to answer.