In Massachusetts, a Marijuana Outlet Rings Up Sales — and Generates Taxes | Business | Seven Days | Vermont's Independent Voice

News + Opinion » Business

Cannabis

In Massachusetts, a Marijuana Outlet Rings Up Sales — and Generates Taxes

By

A display case at Canna Provisions - COLIN FLANDERS ©️ SEVEN DAYS
  • Colin Flanders ©️ Seven Days
  • A display case at Canna Provisions

A white-haired woman from Pittsfield, Mass., disappeared into a building and soon returned holding a paper bag. Sliding into the passenger seat of her sister's car, she described what she had bought — or, more accurately, what a sales associate had told her she had bought. "She said it has everything: It relaxes you, it makes you creative, and it makes you happy. She said it was her favorite." 

The customer was sold. She did, however, have one complaint. "It has a horrible name," she said, peering at the receipt. "Sour Diesel?" 

Barbara Sullivan, 78, had just bought weed in Lee, Mass., where I had gone on April 7 to witness this legal exchange of cash for grass — and virtually every other cannabis product imaginable. I wanted a sense of what to expect when Vermont launches its own retail market next year.

By the time I met Sullivan, I had toured Lee's lone pot shop, Canna Provisions, and received an encyclopedic rundown of its inventory, from pre-rolled joints starting at $10 apiece to eighths of flower fetching $50 and $60 to a colorful assortment of cannabis tinctures, including one priced as high as $110 (Howl's limited-edition Winter Double Strength). I had also made a purchase of my own: a $30 cookies-and-cream chocolate bar from Coast Cannabis that I would later give to a relative with arthritis. 

Yet the most revealing part of the trip came here in the parking lot, where a ceaseless stream of curbside commerce made clear how Canna Provisions had managed to net $16 million in gross sales last year even after being forced to close for 10 weeks during the pandemic: Business was booming.

"It's been like gangbusters," said Jason Bliss, 45, the store's manager. He explained that New York State's legalization of recreational marijuana late last month has eased many travelers' concerns about bringing the drug across state lines. "If you were here yesterday, this would be a slow day."

The ebb and flow still seemed quite hectic from my perspective. A half dozen employees scurried around the parking lot all afternoon, joking with regulars, counseling first-timers and taking orders on iPads. Another group inside the store filled those orders, stuffing THC-infused products into paper bags from a makeshift distribution center set up behind displays on the showroom floor, which was open for limited in-person browsing, though most people used the curbside service.

Debit cards were swiped outside, while those who paid in cash were escorted into the building so that cameras could pick up the exchange, as required by law. All were then encouraged to enjoy their purchases safely — just not here in the parking lot, please.

Similar scenes are now playing out in dozens of other Massachusetts towns. More than 100 pot shops have opened in the Bay State since its retail market came online in 2018. Canna Provisions runs two of them, one in Lee and another in Holyoke.

Nearly two years in, Lee seems to be comfortable with its new industry. Local officials report no spikes in crime nor many traffic-related issues. The store itself continues to be in high demand, particularly among out-of-state customers, who often go on to spend money at other local businesses, buying food or refueling gas tanks. And the pent-up demand illustrated by last week's rush suggests there is still ample room for growth, leading some in Lee to believe that weed may breathe new life into their former mill town.

"That's what I'm hoping to see," said Sean Regnier, 32, a member of the town selectboard. "A rebound."

Meg Sanders, Canna Provisions' cofounder, began her cannabis career in Colorado during the western weed boom of the late 2000s. She started and ran a chain of dispensaries called Mindful for seven years, then stepped down as CEO to consult with other upstart cannabis companies.

That led her to Massachusetts, where, after voters made weed legal in 2016, she and her business partner, Erik Williams, began eyeing potential spots for a new chain of retail stores.

Lee ranked high on their list due in part to its charm: A walk down the brick corridor that is Main Street leads visitors past two churches, three barbershops and Joe's Diner, best known as the setting of Norman Rockwell's famed Saturday Evening Post cover "The Runaway," which shows a police officer sitting at a lunch counter next to a little boy who had fled his home.

But Sanders wasn't willing to settle for just anywhere in Lee. "I said, 'The only reason we should open in Lee is if we can get that location,'" Sanders recalled, referring to the lot where Canna Provisions now operates. "That is a home run.'"

It's not hard to follow her thinking: The property is just 300 yards from Exit 2 of the Massachusetts Turnpike and 10 miles from the New York border.

Town officials recalled mixed reactions when Canna Provisions came seeking a license in 2018. "A lot of people were for it," Regnier said. "A lot of people were, well, not so much against it but worried about the negative impact that it could have — the type of crowds it might attract, the potential smell that could come."

The older population appeared most reluctant, according to selectboard member Patricia Carlino, 70. Nearly two years later, "there's still some hesitancy," she said. "But I believe the majority of people, whether they like it or not, have accepted it." 

Steve Hickson, a 69-year-old who runs Steve's Barber Shop in downtown Lee, agreed with that assessment. "Even if people are really not into it, they don't have a big problem with it," he said.

A billboard directing traffic to the Lee pot shop - COLIN FLANDERS ©️ SEVEN DAYS
  • Colin Flanders ©️ Seven Days
  • A billboard directing traffic to the Lee pot shop

Officials say part of the reason for this shift is that the town has yet to see any negative effects from the shop. Sure, there was that day last summer when a computer glitch backed up orders so much that weed store traffic spilled into neighboring businesses' parking lots, prompting complaints. "But they fixed it within 24 hours, and it was back to normal," Carlino said. "I go by there quite often, and I never see problems."

The most frequently cited explanation for residents' acceptance of the pot shop, officials said, is taxes. Lee took in $988,000 last year through a 3 percent local tax on weed sales and a state-mandated "community impact fee," which the town has set at 3 percent, the highest it can go. The windfall allowed Lee to avoid raising property taxes to fund its $25 million budget last year, despite the financial crunch wrought by the pandemic.

Canna Provisions staff anticipate that its revenues will go up by half, to $24 million, in the store's second year, according to the Berkshire Eagle.

"It's been a success, as far as what was promised," Carlino said. 

Vermont towns and cities can expect far less in dividends from their own retail weed market. While lawmakers imposed a 6 percent sales tax and 14 percent excise tax on retail shops, all of that money goes to the state, not the municipalities that opt to host them. Towns and cities will only take in tax money if they have a 1 percent local option levy on the books; only 16 Vermont municipalities do today.

Of course, not even the financial incentives have been enough to bring everyone in Lee on board. Dave Consolati, chair of the selectboard, said he opposes marijuana sales despite the influx of tax revenues, because there's no guarantee the funds will keep coming.

He was referring to the long-standing controversy about Massachusetts' community impact fees, which cannabis professionals have long viewed as overly burdensome and unnecessary. One store owner is now suing the Town of Haverhill over them, arguing that officials there have failed to explain how the fee is "reasonably related" to mitigating the detrimental impacts of pot shops, as the law requires.

Consolati said he also worries that marijuana legalization will lead to an increase in drug-related crimes and youth use, even though the local police department has reported no such spike. But he fears that it may be too soon to tell. 

"When you take a certain drug, what is the next step? Does it give you the next high?" he said. "My concern is always about the kids stepping up to the next level of whatever it is."

Despite this, Consolati took no issue with Canna Provisions, saying its owners have been "very up-front" about their business. "I can't criticize them in the least," he said.

Canna Provisions will soon face more competition. Another company is seeking to obtain the Town of Lee's second and final retail license, while residents in New York — who have made up nearly 50 percent of Canna Provisions' purchases in recent months — will soon be able to buy legal weed at home.

Still, Sanders didn't seem too concerned. She said she believes tourists will still hop off the turnpike's second exit to pick up their vacation treat, even if they are coming from a place that has its own weed shops.

The company also plans to continue evolving. Case in point: Canna Provisions expected to unveil a new strain of cannabis this week from iconic cultivator Greg "Chemdog" Krzanowski that will only be offered in its stores.

I will leave a description of the strain, named 3 Dog Giesel, to the experts at Northeast Leaf magazine. "For consumers and flavor chasers: Expect a dominant flavor profile of citrus and orange peel leading the front, with a lot of deep skunky technicolor fireworks making for a rich and tasty powerhouse flower," reads a story in the April issue. Right on. 

Time will tell whether Sanders' optimism is warranted — or whether Vermont retail shops will have similar luck winning over their own skeptics. Judging from the scene outside of the Lee store last week, however, the most immediate challenge seems to be keeping up with demand.

As Sullivan and her sister left the parking lot, Luis Foster waited in the passenger seat of a beat-up convertible driven by his father. A 31-year-old from Coxsackie, N.Y., Foster had made the 45-minute trip to Canna Provisions "many, many times" and said that towns everywhere should be opening their arms to pot shops.

"The shit on the street?" he asked. "You don't know where it's from."

He then assumed the role of a drug dealer: "Say you came to me. I could be like, 'Yo, this is OG Kush,'" he said, pretending to throw a bag of weed in my direction. "You wouldn't fucking know! Just like I wouldn't. Here, you can trust it."

A few minutes later, his dad started the convertible, nosed it through Canna Provisions' crowded parking lot and turned toward the Mass Pike.

The original print version of this article was headlined "The Grass Is Greener | In Lee, Mass., a marijuana outlet rings up sales — and generates taxes"