PROVIDENCE – In a city or town with only one store licensed to sell recreational cannabis, the financial performance of that dispensary can boost local tax revenues by six figures or more.
In addition to the 7% state sales tax and 10% state excise tax, Rhode Island's seven licensed dispensaries are also required to collect and remit a 3% local tax on recreational cannabis that is later reallocated to the city or town where the product was sold.
However, not all municipalities are cashing in, according to a July quarterly report from the R.I. Department of Revenue.
Despite local cannabis tax collections up 24.1% year over year, the report found that collections in Providence, home of the Thomas C. Slater Compassion Center, fell 31%, amounting to $78,782 over the last three months of fiscal year 2024...
However, during the same time period, collections increased 68% in Central Falls, with the city collecting $33,932 in additional local taxes. Warwick also spiked 57.4%, receiving $294,175 boost.
Unlike Providence, local tax receipts increased 31.9% in Pawtucket in the last quarter of fiscal 2024, bringing in an additional $147,119.
Joe Pakuris, CEO of Mother Earth Wellness in Pawtucket, credited recent innovations and a friendly local government for a portion of the sales increase. The city has permitted Mother Earth to be open until 1 a.m., hold periodic special events with outdoor cannabis consumption and add a drive-thru window.
“We are the only dispensary with a drive-thru in all of New England,” he said. “We are just reeling them in off the highway. You can buy cannabis like it's a cup of coffee.”
However, Pakuris insisted that Mother Earth's “quality and convenience” is what sets them apart.
“Our business model benefits the consumer. We just grow better product,” he said. “Even the [Thomas Slater] customer base knows that when you want good weed, you come to us.”
According to the May report by the R.I. Division of Taxation which included in the May Revenue Estimating Conference, of the $14.4 million in cannabis taxes collected through April of fiscal 2024, $2.2 million came from the local excise tax. Providence received $407,496.
Since the local tax was implemented
in January 2023, Providence and Pawtucket have raised $752,000 and $728,000, respectively.
R.I. Department of Revenue spokesperson Paul Grimaldi said local competition around Providence may be fiercer than in smaller rural areas where licensed dispensaries have more of a stronghold.
For example, noted Grimaldi, the town of Exeter, with a population of roughly 6,500 residents, outpaced Providence in the three months preceding July, raising $82,497 from the local tax.
Exeter collected a total of $280,320 in 2023 and had already raised $386,195 in the first two quarters of 2024 alone.
After a controversial delay in allowing dispensaries to advertise, despite their Massachusetts competitors already having the green light, Pakuris, who has operated a kitchen remodeling business for more than a decade, has also been putting his marketing skills to work.
Mother Earth recently placed a conspicuous billboard on Interstate 95 within clear sight of the Thomas Slater Center.
“You can’t miss it,” he said.
Requests for comment from Slater Center representatives were not returned.
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com
