Legal Marijuana Massachusetts

FILE - In this July 12, 2018, file photo, newly transplanted cannabis cuttings grow in soilless media in pots at Sira Naturals medical marijuana cultivation facility, in Milford, Mass.  (AP Photo/Steven Senne, File)

BOSTON — As the recreational pot industry takes off in Massachusetts, other nearby states are rushing to get a piece of the tax revenue lost to cross-border sales.

Three bordering states — Rhode Island, New York and Connecticut — appear to be in a race to move forward with plans to legalize pot for recreational use.

In Rhode Island, Gov. Gina Raimondo has "reluctantly" called for legalizing recreational pot as part of a budget proposal, projecting $4.9 million in new revenue.

New York Gov. Andrew Cuomo, a Democrat who supports legalization, has put the effort there on a fast track, including legalization on his agenda for the first 100 days of his third term.

And in Connecticut, where medical pot has been allowed since 2012, Gov. Ned Lamont campaigned on a promise to legalize it for recreational use and has made it a key part of his agenda.

"All of the bordering states are looking at ways to get into this industry, and the interest is being driven by Massachusetts' recreational market," said Jim Borghesani, a marijuana consultant and spokesman for the 2016 ballot campaign that legalized it here. "Even with the few stores that have been opened, the sales that have been generated are opening people's eyes.

To date, Massachusetts, Maine and Vermont are the only three states in the Northeast to have legalized recreational marijuana, to varying degrees.

In New Hampshire, which has decriminalized marijuana possession and allows medical marijuana, a legislative committee last month narrowly approved a bill that would legalize up to an ounce of pot for adults 21 and older and set up a system for regulation and taxation. Legalization is expected to generate up to $31 million a year for the state.

Still, Gov. Chris Sununu, who opposes legalization, has vowed to veto the legislation if it reaches his desk.

Massachusetts is one of 10 states — including Colorado, Washington, Oregon, Alaska, California and Nevada — and the District of Columbia where recreational marijuana is legal.

Its 2016 voter-approved pot law allows adults age 21 and over to possess up to 10 ounces of weed, and it authorizes regulated cultivation and retail sales.

Retail sales of pot are taxed at 10.75 percent on top of the state’s 6.25 percent sales tax. Communities that allow retail sales can charge local excise taxes up to 3 percent and other fees.

To date, 10 retail shops have opened throughout the state, including Alternate Therapies Group in Salem.

The shops have reported nearly $45 million in sales since the first one opened in November, according to the Cannabis Control Commission, which regulates the industry.

A proposal rolled out by Rhode Island's governor would allow possession and tax retail sales of marijuana, but would impose stricter laws and regulations than those in other states that have legalized pot.

For example, it would ban home-growing of cannabis and high-potency marijuana products from being sold on the retail market.

"I do this with reluctance," Raimondo, a Democrat, told the Providence Journal. "I have resisted this. However, things have changed, mainly because all of our neighbors are moving forward.”

The state has allowed medical marijuana patients to grow cannabis at home for more than a decade, and has several medical marijuana dispensaries.

Marijuana consultants say they aren't yet concerned about price wars or market saturation, even with so many states in the region looking to get a piece of the action.

"The cannabis market in these states is going to be tightly controlled," said Valerio Romano, an attorney at the Vicente Sederberg law firm, which works exclusively with marijuana businesses. "They're going to have to have incredibly strict rules and regulations to get these proposals passed by the legislatures, so that is going to restrict the supply."

No state has legalized recreational sales through the legislature yet, but the measures in New York, Connecticut and Rhode Island could put that to the test.

"Even if all these states approve it, it's going to be quite a while before we see the price fall out," Romano said. "We're probably five years or more away from that point."

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhi.com.

Recommended for you