As we enter 2026, the American experiment with legal cannabis has provided enough data to draw clear conclusions. We no longer have to guess what works. We can simply look at the tax codes of various states to understand their legislative intent and their subsequent success or failure as revenue engines. A state’s cannabis tax structure is more than just arithmetic. It is a philosophical statement about whether the government views the industry as a commercial commodity, a dangerous vice, or a social engineering project.

When we analyze the national landscape, distinct patterns emerge. We see the high-efficiency “volume model” initially championed by Michigan, where simple, low flat taxes were designed to undercut the illicit market through capitalist competition. We see the mature “sin tax” model of Washington, extracting maximum revenue from an established consumer base. We also see cautionary tales like California, where layers of state and local bureaucracy created a tax burden so heavy it continues to suffocate the legal market.

Connecticut, unfortunately, has carved out its own niche in the lowest efficiency quadrant of this hierarchy. Our state chose a path defined by complexity and paternalism. We adopted a potency-based tax structure, levying fees based on milligrams of THC rather than a simple percentage of the retail price.
The legislative intent behind this was clear. It was an attempt at social engineering disguised as fiscal policy, designed to penalize high-potency products and modify consumer behavior through artificial pricing. The economic result, however, has been a predictable failure.

The potency tax creates a needlessly complex ecosystem. It forces manufacturers to design products around tax brackets rather than consumer preference. It confuses customers with pricing that fluctuates wildly based on invisible metrics rather than perceived quality. Most damagingly, it keeps legal prices artificially elevated, acting as a persistent barrier preventing consumers from migrating out of the unregulated illicit market.

The failure of this model is not merely theoretical. We have a real-world control group right next door. New York initially launched its adult-use market with a nearly identical potency tax scheme. Empire State legislators quickly realized the structure was a dead end that made their legal market uncompetitive from day one. In a display of pragmatic governance, New York pivoted. They repealed the complex potency tax in favor of a simpler, flatter model to save their market.

Connecticut has done the opposite. Despite witnessing the failure of the policy in a neighboring state, we have stubbornly stayed the course. We watched New York retreat from a bad idea, and we effectively doubled down on it.

This obstinacy plays uncomfortably well into our identity as the “land of steady habits.” Too often, that nickname signifies a resistance to necessary change. In the fast-moving world of cannabis commerce, our steady habit of clinging to a flawed tax structure has made us an island of inefficiency. We are surrounded by states with simpler, more competitive models, bleeding potential revenue daily to Massachusetts border stores and untaxed street dealers.

It is time to break the habit. If we are serious about turning our currently moribund cannabis industry into the significant revenue engine it was promised to be, we need a hard reset. This requires more than merely tweaking tax rates around the edges. It demands a hopeful, holistic revisiting of cannabis regulation as a whole.

We must shift away from a framework prioritizing control and social engineering toward one prioritizing market viability and consumer reality. We can absolutely maintain high standards of product safety and quality testing without choking the economic life out of the businesses we invited to open. The data is in. It is time for Connecticut to read it and adapt.

Lou Rinaldi
Guilford, CT