By Marta Hill
Massachusetts’ crop with the highest cash crop value is not what you might expect: according to Leafly, a cannabis discovery site, cannabis comes out on top of the rankings.
According to Leafly’s 2022 Harvest Report, the dollar value associated with adult-use cannabis products in the Commonwealth is $361 million. The next highest ranked is cranberries, pulling almost $66 million in 2021, according to the 2021 State Agricultural Review.
Legal cannabis distribution is a relatively new market in Massachusetts — in 2016 recreational cannabis was legalized through a ballot question and the first two stores opened in November 2018.
A lot of growth has happened in those few years, Eric Rogers, a consultant at Rogers Cannabis Consulting and co-founder of cannabis-infused beverage company Levia, told Boston.com.
“I think right now in Massachusetts the market is really starting to mature,” he said. “We’re turning a corner in that as the Cannabis Control Commission has continued to license new operators in the state we’ve seen an influx of cultivators. This fall is sort of the most significant crop that the Massachusetts cannabis market is seeing.”
The growth has its pros and cons, for both growers and consumers. Consumers have likely noticed a drop in sticker price for cannabis, Rogers said.
“There is this sort of influx of the raw ingredient of cannabis flower, flooding the marketplace right now,” he said. “So depending on which side of the table you’re sitting on that can be alarming, for cultivators … because suddenly their most valuable asset is worth less,” he said. “However … that is a really big win for consumers. This is a trend we’ve observed in every mature cannabis market. You start to see the per pound costs for cannabis flower to start to tumble to more realistic and approachable levels.”
Because of historically high barriers to entry, many people still turn to the illicit market to obtain cannabis, April Arrasate said. Arrasate is the founder and CEO of Seed, a Boston dispensary, and founder and executive director of Core Social Justice Cannabis Museum.
“As the market starts to saturate and more and more people come on, prices go down,” she said. “What’s good about that is the people who have been utilizing the illicit market for their whole lives to consume cannabis are drawn into the legal market because the prices start to mirror one another.”
Legal cannabis is also tested for things like heavy metals and pesticides, Arrasate said. She drew a comparison to broccoli, saying, “Would you buy broccoli off the street? No, this is something you are ingesting.”
A big part of the history of the cannabis industry needs to be examined from a social justice lens, both Arrasate and Rogers said.
“Massachusetts was the first state that really focused on social equality as they were rolling out and developing the legal market. Social equity participants in the market here in Massachusetts, they have been qualified into this program,” Rogers said.
The Massachusetts Cannabis Commission’s Social Equity Program “creates sustainable pathways into the cannabis industry for individuals most impacted by the War on Drugs, marijuana prohibition, disproportionate arrest, and incarceration,” the website reads. It includes a technical assistance and training program to help people apply for and obtain a license though the Commission. There are also a variety of fee waivers and exclusive license types available for different situations.
The war on drugs had and continues to have disproportionate effects on low income and minority communities, Arrasate siad.
“If you get busted for cannabis and you have money, you’re not going to jail. If you get busted for cannabis and you’re poor, you’re going to jail,” Arrasate said.
That is why Core Social Justice Cannabis Museum was founded: to educate people about the history of cannabis prohibition, and its impacts on low income and minority communities.
The biggest change Rogers has seen over the evolution of the cannabist market in Massachusetts is its growth. Starting in 2016 when it was legalized, there was no infrastructure to support the market and now there is.
“The biggest change is accessibility. You can now find a dispensary pretty easily. They’re not all near population centers yet, but as communities see that the world has not ended with cannabis in Massachusetts, they’re starting to be more open to that, to really take advantage of the tax benefits for a community to welcome cannabis,” Rogers said.
The national landscape for cannabis is complicated by the fact that the federal government still considers it a Schedule 1 drug, a designation that says there is no current accepted medical use and that the drug has a high potential for abuse, Arrasate said.
Since each state handles it differently and it is illegal federally there aren’t really any nationally-scaled cannabis brands, Rogers said.
“Each state is almost a little microcosm because the state dictates what the law is in regards to cannabis,” Arrasate said. “So in a place like California or Oregon, where the market is very saturated, you can get very low prices. The way that impacts the East Coast is that a lot of that product comes here across state lines illicitly.”
Another problem cannabis producers face as a result of federal rules comes in the form of taxes.
“The big challenge is that the federal government still considers cannabis a Schedule 1 controlled substance that means it has no medicinal value and a high potential for harm. Also, LSD and heroin are in that class,” Arrasate said. “The real impact on cannabis companies for that is we are subject to a tax code rule called 280 E. And it basically doesn’t allow you to make regular business deductions for an illicit activity.”
This means cannabis businesses can’t deduct things like employee salaries, rent, and other regular business deductions, Arrasate said.
“Even if cannabis is outpacing cranberries in production, or even in volume or even price, we still don’t have the same benefits that the cranberry company has because we are getting taxed at the gross profit line,” she said.
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