Significant Changes Resulting from Cannabis Bill H.3818

Massachusetts Governor Charlie Baker recently signed an overhaul of the state’s voter-passed recreational marijuana law: Massachusetts Bill H.3818 (AN ACT TO ENSURE SAFE ACCESS TO MARIJUANA).  AAFCPAs highlights a number of significant changes that will affect the Massachusetts cannabis industry—some of which take effect immediately.

The immediate changes include:

  • The repealing of the requirement that all medical marijuana licensees organize as not-for-profit corporations, and providing the ability for current and certain provisionally licensed registered marijuana dispensaries to convert to for-profit entities;
  • Certain smaller-scale businesses may enter the cannabis industry via a craft cultivator cooperative system and will be subject to a lesser “reasonable fee” for licensure as a craft marijuana cultivator cooperative;
  • Cities and towns in which a majority of voters voted in favor of legalizing adult-use marijuana may only limit or prohibit these businesses from operating in their town through a voter referendum, however if a city or town voted against legalizing adult-use marijuana, they may limit or prohibit these businesses from operating in their town through a decision by their local governing authority only;
  • The state excise tax on marijuana has been increased from 3.75% to 10.75% and the optional municipal tax has been increased from 2% to 3%, bringing the maximum effective tax rate on the retail sale of adult use marijuana to 20%.There will still continue to be no tax assessed on purchases of medical marijuana; and
  • Key dates to note are March 15, 2018, when the Cannabis Control Commission (CCC) must have regulations, guidelines and protocols in place to issue licenses for adult-use marijuana businesses, and April 1, 2018, when the CCC must begin to receive applications for adult-use marijuana licenses. However, the CCC will not issue any adult-use marijuana dispensary licenses until June 1, 2018.

Click here to read further details on the new law:
AAFCPAs has a proven track record of effectively advising the Massachusetts cannabis industry on: audit and assurance; tax planning and preparation; entity structure; financing structures; business plans; development of the state’s management and operations profile; financial projections; cost allocations; accounting operations; and more. Our blend of Nonprofit and Commercial company expertise, and 40+ years’ success in serving both, makes us uniquely qualified to assist cannabis businesses in navigating through this complex and burgeoning industry.
If you have any questions, please contact your AAFCPAs partner or Dave McManus at 774.512.4014,

About the Author

David McManus CPA
Dave leads AAFCPAs’ Cannabis Business Practice, providing highly coveted tax, entity structure, and business advisory solutions.  Dave has been deeply immersed in understanding the complex financial and operational nuances of the cannabis industry since 2012. He advises multi-state operators, recreational and medical retailers, cultivators, product manufacturers, and investors. He proactively advises clients on risks, opportunities, and tax implications related to market entry, accounting methods, capital structure, debt financing, R&D, M&A, and goodwill impairment. He has led industry training sessions on interpreting and implementing new federal and state marijuana statutes, including compliance with 280E. Dave maintains a strong network of cannabis industry investors, attorneys, bankers, employee compensation and benefits providers, realtors, risk managers, and insurance agents, and he leverages these resources as appropriate to help clients achieve success.