On June 22nd, 2021, Connecticut became the 19th State to legalize the recreational use of marijuana. Put into effect on July 1st, individuals 21 years of age and older are able to legally possess and consume marijuana. Retail sales in Connecticut are not expected to begin until as early as the summer of 2022.
The Senate President Pro Tempore, Martin Looney, D-New Haven, remarked, “We will have a regulated product, a taxed product and a system for use by adults, as we have for tobacco, as we have for alcohol.”
The nearly 300-page bill includes several provisions that focus on building an equitable marketplace. The legislation requires at least half of all initial licenses to be awarded to social equity applicants from communities disproportionately impacted by drug-related crimes and high unemployment.
If the success of Connecticut’s predecessors is any indication, this will be a lucrative endeavor for those involved. California, Florida, Illinois, and Colorado are among the states that have experienced overwhelmingly robust growth in 2020, coming largely from recreational sales.
Other important areas covered by the new bill include details on the amounts an individual can have on their person and plans for the commencement of retail sales in 2022, which requires a license from the state to sell. The law includes a 3% municipal sales tax directed to the town or city in which the sale occurs, the 6.35% state sales tax, and a tax based on the THC content of the product. Cannabis edibles will have 2.75 cents added per milligram of THC, cannabis flower will have 0.625 added per milligram of THC, and 0.9 cents per milligram of THC will be added for all other products.
The Innovative CPA Group can successfully help you navigate your cannabis or hemp business. We service a number of clients who operate in the industry and we provide them with a wide array of services including but not limited to: tax preparation, registrations, bookkeeping, consulting, etc.
If you are looking to start a cannabis or hemp business, and/or have questions regarding the accounting and taxation of cannabis, please contact our professionals at The Innovative CPA Group at 203-489-0612. Or contact us online.