Connecticut sells $23 million worth of cannabis in May

Connecticut picked up $23 million worth of cannabis in May, according to NBC. And this number is not a deviation. The raw numbers show that adult cannabis revenue has increased monthly this year. In April, Connecticut made $21 million from legal cannabis sales.

Of the $23 million total raised in May, $11.5 million came from recreational sales, while $11.2 million came from the medical marijuana market, the Connecticut Department of Consumer Protection reports .

One of the most common arguments for legalizing cannabis is the revenue that can be generated from its sale. If you ever need to convince a conservative or liberal person why weed should be legal, show them the money. In Connecticut, officials said patients using medicinal cannabis purchased more than 312,000 products, while consumers using adult cannabis purchased more than 292,000 products. DCP data shows that the average amount patients spend on medical cannabis is $35.86, while the figure for recreational purchases rises slightly to $39.47.

The Connecticut government is on track to record the second-largest budget surplus in state history this summer, according to the CT Mirror. And it appears that a sizable chunk of that can be attributed to cannabis sales.

Preliminary data, which shows nearly $23 million worth of cannabis, excludes point-of-sale taxes on purchases for adult use and is pending further review by the Department. Medical marijuana patients don’t pay taxes on the purchase of their product because it’s a medicine (it’s still heartening to hear that governments are finally acknowledging the plant’s role as a medicine rather than an anxiety drug).

Connecticut legalized cannabis back in 2012. Adult use was enacted in June 2021 and sales for adult use began in January 2023 at licensed retailers. While medicinal patients can purchase up to five ounces per month and not have to deal with individual transaction limits, when purchasing recreational weed you can expect a per-transaction limit of a quarter ounce of raw flower or the equivalent.

However, keep in mind that despite the abundance of such numbers, it is still difficult to make a profit as an entrepreneur from cannabis. Just look at California, which is considered the mecca for marijuana. The state is currently experiencing a “mass exodus,” with brands like Jerry Garcia’s Garcia Hand Picked cannabis line being shut down because California tax rates can no longer make them profitable. The cannabis use tax is 15% of gross receipts from the retail sale of cannabis or other cannabis products in California. This number is consistent with the Connecticut tax, which is based on THC content and is around 10-15% of the retail price. The overall cannabis tax rate in Connecticut totals about 20% of the retail price of cannabis sales, which is also comparable to Massachusetts tax rates. Additionally, under the Marijuana Revenue and Regulation Act, cannabis companies pay an effective federal tax rate of up to 80%.

In addition to taxes, cannabis companies face other hurdles. It’s difficult for marijuana companies to get credit and raise capital. Despite social justice efforts (and Connecticut’s first social justice cannabis delivery company opened this month), the high entry fee makes market entry difficult for communities affected by the War on Drugs, especially those concerned with the legal ones face costs of imprisonment. Also, since products cannot cross state lines, the lack of interstate commerce means that if you want to sell in more than one state, you’ll need new equipment for everything from a farm to a factory. These are issues that the government has not yet addressed. Therefore, despite its optimistic numbers, the US is not yet in a position to appreciate the benefits of legalization at the state level.