A windfall in shades of green for county's cannabis retailers, town coffers

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This story has been updated to correct the total amount of revenue that the town of Great Barrington received from marijuana sales, as well as the revenue reporting period associated with both municipalities.

GREAT BARRINGTON — Results are in, and the picture is, well, very green.

Early earnings from the county's first two marijuana retailers show signs of a blossoming industry capable of sending millions into the community each year, though revenues trickled in more slowly in Pittsfield than in Great Barrington.

The two municipalities have received their first checks from the state's Department of Revenue — $45,661 for Great Barrington and $10,532 for Pittsfield — reflecting taxes earned on cannabis sales for only the month of January. The earnings cast a first light down a new avenue for the Berkshires in the age of legal pot.

The county's first recreational retailer, Theory Wellness, grossed more than $6 million in sales in less than three months. From this Great Barrington will bank $185,807 in a community impact fee for mitigation of the effects of marijuana use in the community. Theory has also agreed to donate $10,000 annually to a local nonprofit of its choice.

The Great Barrington medical dispensary opened for recreational business Jan. 11. 

"We're trying to keep up with demand," Theory spokesman Thomas Winstanley said Wednesday afternoon, when the line outside was about 45 people deep — a short line by Theory standards, and getting shorter every day as the company has hired more staff and boosted preorders that can be picked up later.

The parking lot was awash in New York license plates. Inside, it was like opening day all over again, with good, aromatic cheer and a Grateful Dead soundtrack coursing through the party.

In its first-quarter report to the state Department of Revenue, the company reported $6,193,574 in sales, according to CEO Brandon Pollock.

Of the state's 20% sales tax on marijuana products, both municipalities get a 3% cut. Great Barrington imposes a community impact fee, meaning that an additional 3% comes to the town directly from the marijuana retailer.

Pittsfield doesn't impose a community impact fee, but instead charges flat annual community host fees on a graduating scale, beginning at $60,0000 annually and increasing to $200,000 annually for the fourth and fifth years.

Statewide, gross sales hit $76.8 million as of the first week in April, reflecting the statewide total since retail sales came online in November.

And while towns and cities across the state have struggled with regulating this new industry since voters approved legalization in 2016, there is a different kind of high to be had from seeing the tax revenue numbers.

"We keep talking about economic development," said Great Barrington Select Board Vice Chairman Ed Abrahams. "For better or for worse, this is some."

Abrahams pointed to local businesses also reaping the green with a hand from Theory.

"I have anecdotal reports that people are coming into town and spending money," he said.

Robin Helfand of Robin's Candy said she is seeing an uptick in business from cannabis customers. She helps it along by handing out candy and coupons to shoppers waiting in Theory's line.

Pittsfield numbers

The city collected $10,532, corresponding to revenues earned during the month of January. Temescal Wellness, which opened Jan. 15, was the only open recreational cannabis retailer in Pittsfield during that time.

A 3% sales tax goes to city coffers, meaning that the first $10,532 check from the state's Department of Revenue puts Temescal's sales for that period at about $351,067.

Brandon Morphew, marketing director at Temescal, said revenues were in line with expectations.

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"It's a new market, and we're happy with where we're at," he said, noting the company is working to introduce new products.

Berkshire Roots on Dalton Avenue has since come online, becoming the third recreational cannabis retailer in the Berkshires — and the first retailer to also grow and manufacture its products in the county — when it opened this month.

Matt Kerwood, the city's finance director, said he deposited half of the money into the city's stabilization account and the rest into the general fund.

The city does not impose a percentage-based community impact fee like Great Barrington does, he said, but rather charges flat annual community host fees on a graduating scale.

He said that each retailer is contractually obligated, per host agreement, to pay the city $60,000 for the first year in operation, $100,000 for the second year, $150,000 for the third year, and $200,000 each for the fourth and fifth years of the contract.

Host agreements are five-year contracts, he said, as required by state statute.

"The clock starts ticking the day they begin operations," he said, noting that bills will come biannually.

Companies operating in both the medical and recreational realm must have host agreements with the city for each side of their business, doubling those annual community host fees for companies like Temescal Wellness and Berkshire Roots.

More Berkshire buzz

In Great Barrington, four more pot retailers are awaiting state licenses. If approved, the town will have a total of five stores, including three downtown. There are at least eight cannabis retailers in the Pittsfield pipeline, two of which are open and five of which await state licenses.

Silver Therapeutics in Williamstown has a license but awaits a final nod from the state before it can open.

Abrahams said the competition might temper the revenue stream, as would legalization in Connecticut and New York, whose borders are close by.

"We shouldn't get used to this, but it's definitely a windfall that's coming," he added, noting that if Theory's sales were to continue at this rate, it would mean that more than $900,000 would be pumped into town coffers every year.

Winstanley said that Theory, which will host a local food truck Saturday for 420, is ready to stay on top of the market, noting "tens of thousands" of shoppers have come here since the shop opened. He declined to give an exact number.

It is so busy here that the shop menu has to be changed daily, according to inventory shifts. Shipments come several times a week.

The store now has 30 to 35 employees just to keep up, and with preorders, is now able to move 80 people through in an hour. When Theory opened, it was moving 20 shoppers an hour.

"We're still very new at this," Winstanley said, explaining that the company is always poised for adjustments in a business that draws from a wide range of demographics, ranging from the schoolteacher with trouble sleeping to the veteran trying to treat his post-traumatic stress disorder.

Theory also is expanding into outdoor growing to supplement its indoor facility. It now has a provisional license to grow in Sheffield, where company leaders plan to partner with Equinox Farms owner Ted Dobson.

With an extract wax called Schnazzleberry, and flower called Blackfire, it's no wonder that sales are so brisk, and why each new customer needs help from the enthusiastic young staff to interpret the offerings.

"The menu can be overwhelming," he said.

Heather Bellow can be reached at hbellow@berkshireeagle.com, @BE_hbellow on Twitter, and 413-329-6871.

Amanda Drane can be contacted at adrane@berkshireeagle.com, @amandadrane on Twitter, and 413-496-6296.


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