Rhode Island's legal cannabis industry sold more than $1.6 million worth of weed during the first week of adult-use sales.
The country's smallest state kicked off its adult-use industry on December 1st, less than six months after lawmakers legalized weed. Regulators were able to accomplish this lightning-fast turnaround by authorizing 5 of the state's 6 existing medical cannabis dispensaries to start selling weed to any adult. During that first week of recreational sales, these dispensaries sold just over $1.63 million of weed, the state Department of Business Regulation reports.
So far, medical marijuana sales still dominate Rhode Island's legal cannabis market. Dispensaries sold more than $845,000 worth of medical marijuana in the first week of December, but only moved around $786,000 worth of recreational bud that same week. But even with the slow start, recreational sales provided a welcome boost. Prior to adult-use legalization, the state's dispensaries were only selling around $1 million worth of medical pot a week.
The state's new adult-use law imposes a hefty 20% retail tax on all adult-use sales, more than double the 7% tax imposed on medical sales. So even though adult-use purchases accounted for less than half of the week's total sales, they will still bring the state around $133,600 in tax revenue. In contrast, the larger share of medical sales will only net about $59,000 in revenue for that week. An additional $23,500 will go to the six municipalities where the dispensaries are located.
Over the next fiscal year, the state Office of Management and Budget predicts that legal cannabis sales will bring in nearly $6 million in tax revenue. A large percentage of this income will go to cover the costs of administrating the new adult-use program, though. Another chunk of change will also be used to fund a new program that will automatically expunge cannabis-related criminal records by next July. After these costs, the budget office predicts that they will only net around $368,000 in weed tax revenue this fiscal year.
The new adult-use law will also reduce the state's overall revenue intake over the next year or so. Although legalization may cut law enforcement costs by allowing cops to focus on serious crime, state courts will no longer be able to charge exorbitant court fees to people arraigned for minor cannabis crimes. The new law also removed the fees for medical marijuana card registrations or renewals, which will eat into the overall budget as well.
But that shortfall will be short-lived. The state plans to open as many as 33 exclusive adult-use retail outlets, and 85% of Rhode Island municipalities have opted-in to allowing legal pot shops to open in their jurisdictions. Analysts predict that the industry will make $80 million by next December and eventually up that total to $300 million a year by 2027.
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