How Much Is Dispensary Tax in Massachusetts?
If you're purchasing recreational cannabis in Massachusetts, it's important to understand the taxes applied to your purchase. As of 2025, the total tax on recreational cannabis can reach up to 20%, comprising several components:
Breakdown of Cannabis Taxes
State Excise Tax: A 10.75% excise tax is imposed on the retail sale of cannabis and cannabis products.
State Sales Tax: A 6.25% standard sales tax applies to all cannabis purchases.
Local Option Tax: Municipalities have the authority to impose an additional local tax of up to 3% on retail cannabis sales.
These taxes are cumulative, meaning that the total tax burden on a recreational cannabis purchase can be as high as 20%, depending on the local tax rate imposed by the municipality where the purchase is made.
Medical Cannabis Exemption
It's worth noting that medical cannabis is exempt from these taxes. Patients with a valid medical marijuana card do not pay the state excise tax, state sales tax, or any local taxes on their medical cannabis purchases.
Implications for Consumers
Understanding these taxes is crucial for consumers, as they directly impact the final price of cannabis products at dispensaries. While a product might be listed at, say, $50, taxes can push the total cost up to $60 or more, depending on the local rate. This 20% or higher markup can catch first-time buyers off guard if they’re not aware of the breakdown.
For regular consumers, these added costs can accumulate quickly over time, making recreational cannabis a significant monthly expense. It can also create a price gap between the legal market and unregulated sources, which may tempt some buyers to seek cheaper, untaxed alternatives—undermining the goals of public safety and cannabis legalization.
Ultimately, being aware of the full tax burden helps consumers budget accurately and make informed decisions about where and how often to purchase. It also highlights the value of medical cannabis registration, which exempts patients from these taxes entirely.
Final Thoughts
Massachusetts imposes a multi-layered tax structure on recreational cannabis, with a total tax rate that can reach up to 20%. Being aware of these taxes can help consumers make informed purchasing decisions and understand the final cost of their cannabis products.
Want to better understand Massachusetts dispensary taxes and how they affect your costs? Reach out to Dimov Associates today for expert guidance and tax insights.
