Minnesota cannabis tax hike proposed ahead of first sales

Adult-use marijuana sales have yet to launch in Minnesota, but state lawmakers are already proposing a tax hike.A recently announced budget agreement would raise the gross receipts tax from 10% on sales at licensed businesses to 15%, according to CBS News Minnesota.

ADVERTISEMENT Minnesota legalized adult-use marijuana in 2023, but sales may not launch until next year.In the meantime, lawmakers have a sizable projected budget deficit to close.

The tax increase would be on top of the state sales tax rate of 6.975% and any local sales taxes.The tax would also apply to hemp-derived THC edibles such as the beverages sold at liquor stores and other non-cannabis retailers.

If approved, the increase would make Minnesota’s taxes higher than neighboring states where adult-use marijuana is legal.Michigan imposes a 10% excise tax on retail sales, plus a 6% sales tax, though Michigan Gov.

Gretchen Whitmer has proposed a sizable tax hike.The tax structure in Illinois is more complicated.

That state imposes a 10% tax on retail sales of cannabis products with less than 35% THC and 25% on retail sales of products with THC concentrations greater than 35%.Some cannabis advocates have expressed concern that a 15% surcharge would make legal cannabis too expensive and allow the illicit market to prosper.

ADVERTISEMENT “When we legalized adult-use cannabis, we talked about how this is not a cash cow,” state Sen.Lindsey Port, one of the marijuana legalization law’s authors, said during a committee hearing.

“It’s not an answer to the state budget’s concerns,” Port added.“I’m frustrated to see it is being used in that way because it will not be successful.”   ...