SPRINGFIELD, MA (WGGB/WSHM) — Connecticut cannabis consumers are crossing state lines into Massachusetts for cheaper products, as high taxes and strict regulations in Connecticut drive customers to neighboring states where they can purchase the same products for a fraction of the price.

Carl Tirella Jr. founded BudHR Cannabis in West Hartford, CT and sees this impact firsthand. He said Connecticut’s unique tax structure leads to an average 25 percent tax, including a variable tax based on potency. “So the origination of that tax was, I think, based on safety of consumers, right? So the Connecticut lawmakers wanted to really ensure that the higher potency was in, quote-unquote, less hands, right, and be in more of a safe mindset to the consumer,” he noted.

Tirella added customers pay up to three separate taxes when they buy from BudHR: a six percent state tax, a three percent municipal tax, and a third variable tax based on potency. “On an average basis, we see the effect of tax anywhere from, call it, 16 percent to 20 percent on that variable tax, so which means that you have a higher overall tax paying by the consumer on any given product. So, we see Massachusetts and New York, somewhere between, call it, 20 percent and 22 percent effective tax rate. Connecticut’s more like the 25 percent to 26 percent because of that variable tax structure,” he explained.

Conveniently located just minutes off I-91, Primus Cannabis in Springfield is benefiting from Connecticut’s higher taxes. General Manager Zachary Fisher said fierce competition from nearby corporate dispensaries drives a “race to the bottom” for the lowest prices. “We are seeing an uptick in Connecticut customers, even with the recreational status being what it is in Connecticut. People would rather, you know, pay cheaper prices,” he said.

Fisher doesn’t recommend customers travel across state lines with cannabis, which violates federal law, but he said he is shocked at the potency taxes that Connecticut customers face. “Well, Massachusetts very typically just has a 20 percent tax across the board. Like, I can usually just do the math in my head when charging somebody a product, you know? Connecticut, with the potency tax, I think I was a bit shocked just when I heard about that because, really, what it’s saying is you can have more weight of product and pay a cheaper amount if it’s just not as strong,” he added.

Connecticut businesses are losing out as Massachusetts dispensaries see a boom in cross-border sales. The question remains whether Connecticut lawmakers will change the tax structure to keep consumers and their dollars in the state. Just this month, a bill was introduced in Connecticut to alter the potency tax. It would replace the current system with a 10.75 percent excise tax on all adult-use cannabis sales.

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