Pubdate: Mon, 17 Aug 2015
Source: Boston Globe (MA)
Copyright: 2015 Associated Press
Author: Amy Anthony, Associated Press


PROVIDENCE (AP) - It has been two years since Rhode Island launched 
its medical marijuana market and opened dispensaries around the 
state, but tax revenues haven't been quite as high as state officials expected.

There are now three medical marijuana dispensaries - also known as 
compassion centers - selling marijuana to patients in Rhode Island, 
with the state collecting a 4 percent surcharge and a 7 percent sales 
tax on all their transactions. While revenues are increasing, some 
centers say they're facing increasing competition from caregivers who 
can grow and sell medical marijuana without paying taxes to the state.

"There are people out there who've made this a full-time business," 
said Chris Reilly, a spokesman for the Thomas C. Slater Compassion 
Center in Providence. "It's a competitive force that's real."

State officials report that medical marijuana revenues are about half 
of what was predicted as the state prepared to legalize compassion 
centers. The dispensaries don't have to disclose sales figures, but 
the state discloses aggregate figures for the revenues it collects.

In 2012, the Rhode Island Department of Revenue estimated that sales 
tax from medical marijuana would total approximately $2 million and 
that the surcharge would total approximately $1.1 million by 2016. 
Now, the department is projecting that sales tax will be about $1 
million and the surcharge about $675,000 in fiscal year 2016.

"One million dollars is nothing to sneeze at, but if you think about 
meals and beverages, on the sales tax side, that's about 20 percent 
of our sales tax, that's $150 million to $160 million a year or 
more," said Paul Dion, the chief of the Office of Revenue Analysis at 
the state Revenue Department.

The Revenue Department's estimates in 2011 were based on estimates it 
received from compassion centers as they prepared to open, Dion said. 
The department did not take into account an increase in caregivers 
because it expected the compassion centers to do that, he said.

In 2011, there were 2,732 licensed caregivers; now there are 3,245, 
according to the Health Department.

While the revenues have been lower than projected, they are 
increasing. The Rhode Island Division of Taxation reports the amount 
of surcharge revenue the state collects increased from $269,156 in 
2014 to $385,724 in 2015, a 43 percent increase.

The number of medical marijuana patients has also increased, from 
4,241 in 2011 to 11,620 this year, according to the latest data from 
the state Health Department.
- ---
MAP posted-by: Jay Bergstrom