High Cannabis Taxes Push Connecticut Consumers Across State Lines To Massachusetts

Connecticut cannabis consumers are crossing state lines into Massachusetts for cheaper products, as high taxes and strict regulations in Connecticut drive customers to neighboring states where they can purchase the same products for a fraction of the price.

Carl Tirella Jr. founded BudHR Cannabis in West Hartford, CT and sees this impact firsthand. He said Connecticut’s unique tax structure leads to an average 25 percent tax, including a variable tax based on potency. “So the origination of that tax was, I think, based on safety of consumers, right? So the Connecticut lawmakers wanted to really ensure that the higher potency was in, quote-unquote, less hands, right, and be in more of a safe mindset to the consumer,” he noted.

Tirella added customers pay up to three separate taxes when they buy from BudHR: a six percent state tax, a three percent municipal tax, and a third variable tax based on potency. “On an average basis, we see the effect of tax anywhere from, call it, 16 percent to 20 percent on that variable tax, so which means that you have a higher overall tax paying by the consumer on any given product. So, we see Massachusetts and New York, somewhere between, call it, 20 percent and 22 percent effective tax rate. Connecticut’s more like the 25 percent to 26 percent because of that variable tax structure,” he explained.

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