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Lee Receives First Revenues From Legalized Marijuana Sales

A shot of the Canna Provisions building with a "Now Open" sign
Josh Landes
/
WAMC
Canna Provisions on its opening day in July 2019.

The first recreational marijuana dispensary in Lee, Massachusetts, has made its initial Community Impact Fee payment to the town.

Canna Provisions opened in July, and after three months of sales, is giving a legally mandated slice of its profits to its host community.

“It’s a 3 percent fee, it’s allowed by the CCC – the Cannabis Control Commission set that, and towns can tax up to 3% of gross sales," said Lee select board chair Thomas Wickham. He says the payment offers a sense of what Canna Provisions could pay to the community of around 5,700 on a yearly basis.

“Their first payment was about $109,000, plus there’s some excise tax on the building – a quarterly payment," he told WAMC. "So that does work out to over $400,000 – almost a half a million dollars.”

Canna Provisions says the additional excise tax is around $28,000. That contribution goes towards the town’s yearly operating budget of around $25 million. Based on the impact fee, the company has made around $3.7 million during its first quarter.

After a great deal of enthusiasm from town leaders about the store’s potential impact on Lee, Wickham says they’re happy with the first quarter’s returns.

“The income level is fantastic, I’m glad they’re doing well. It’s just a matter of what you want to do with that money at this point,” said the select board chair.

“Every single day, we find our numbers are growing, we’re finding that more people are finding out about us," said Canna Provisions CEO Meg Sanders. “That’s probably the hardest part in this industry, because of the very strict advertising requirements as well as things like Facebook and Instagram, and other social aspects and google, for example, are very strict with our industry. And so we have a very limited ability to get the word out to consumers.”

“You know, we understand this is a new industry, and there’s a lot of preconceived notions," said Eric Williams, Canna Provision’s COO. “We do believe that this is going to become a much more normalized business moving forward, and hopefully not subject to such taxation at the levels it is now. As we always say, we really just want to be treated like any other business.”

Sanders – a veteran of Colorado’s marijuana industry, which is not held to similar host community agreements – isn’t holding her breath.

“We’re probably a long way away from that," she told WAMC. "At the speed that this is all rolling out, I would say that’s very far in the future. And I think the Commonwealth enjoys and supports the local control – and that’s what it’s about in Massachusetts, is those townships having the control. And I think it’s really important that towns have an ability to regulate this industry to the letter of the law.”

In addition to the tax revenue the dispensary brings Lee, Canna Provision touts its 40 plus employees, as well as its use of local contractors and volunteer hours the company undertakes. Wickham says so far – despite some in the community opposing its presence – the town hasn’t registered a clear negative impact from the business.

Based on what was going on in Barrington, I thought there’d be a traffic problem there, of people getting in and out – but that hasn’t seemed to materialized. They seem to be able to have the traffic flow very well down there.”

Asked about the potential impact the industry could have on normalizing marijuana use for a generation of young Americans, Williams pushed back.

“We can make unfounded projections into the future, or we can look at what’s actually happened across the nation when you’ve had communities that have allowed a regulated cannabis market, a well-regulated cannabis market, we actually see teen usage declining," he told WAMC.

For now, Lee’s leadership hasn’t yet worked out where the collected fee money will go.

“We’re debating maybe putting it on the warrant, as something that the town – we’re a town representative form of government – that we could all say to the voters, ‘listen, we’re going to say that we spend 50% of this on roads and infrastructure and water projects, and then maybe the other part in the general fund or maybe they’ll want it to go to somewhere else, and you can actually vote on that!’" said Wickham. "And I would kind of be for that – as a taxpayer in Lee, it’s like, OK, you got the money, what are you doing with it? Just don’t let it disappear into the abyss as somethings seem to happen with income taxes for the town. So this would be a good deal.”

Looking down the road, Canna Provisions says it will open two more locations in the state by the end of the year, one in Holyoke. In Lee, Wickham says the town has more to look forward to from the company.

“Canna is also doing a grow facility, an OPLI – which is ‘Office Park Light Industrial.’ We have it off of Route 102," he told WAMC. "That is probably the bigger part of this whole scenario for Lee, is the growers are also taxed at 3% of their gross sales. Currently, we’ve got six growers trying to come into Lee – that’s quite a few jobs. Couple years from now, let’s see how all that works. I don’t want to say that it will create a lot of income, but it has the potential to create a lot of income for the town of Lee.”

He sees the cannabis industry as a crucial element in the town’s revival.

“It is the private sector, so hopefully everybody succeeds, but you don’t know," said Wickham. "All we can do is give them the tools to succeed as a town, and that part of it with the job creation and the mills coming back online and being rebought up and retooled for another industry is very exciting. It’s a very exciting time for Lee.”

Josh Landes has been WAMC's Berkshire Bureau Chief since February 2018, following stints at WBGO Newark and WFMU East Orange. A passionate advocate for Western Massachusetts, Landes was raised in Pittsfield and attended Hampshire College in Amherst, receiving his bachelor's in Ethnomusicology and Radio Production. His free time is spent with his cat Harry, experimental electronic music, and exploring the woods.
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