Marijuana sales broke records statewide this year, but trends in Arlington are headed in the opposite direction.
Since legal sales of recreational marijuana use in Massachusetts began in 2018, the industry has generated over $8.6 billion in sales, according to the Cannabis Control Commission. Last month alone, the state reported over $140 million in sales. Marijuana sales have produced $264 million in tax revenue for the state and the communities where stores are located.
Last year, the same commission released a dataset outlining the tax revenue benefits of marijuana legalization for municipalities that allow sales. The report said Arlington would bring in $309,000 in 2024. In reality, Arlington collected about half that much – $166,104.
The town’s tax collection projections have been adjusted downward for next year, said Town Manager Jim Feeney. The last time Arlington reported an increase in revenue was 2022, the year after marijuana sales began in town.
In Massachusetts, consumers typically pay three separate taxes totaling 20 percent on marijuana products, driving up their bill at the register: the 6.25 percent state sales tax, a 10.75 percent excise tax and usually a 3 percent local option tax.
The state imposes the excise tax at the retailer level of the supply chain. Individual businesses collect the tax from customers and remit it to the state. That is on top of the statewide 6.25 percent sales tax that applies to most products sold in Massachusetts. Each municipality that allows recreational sales can also impose a local option tax of up to 3 percent, and most do.
Since peaking at $340,940 in 2022, Arlington’s revenue from cannabis sales has steadily declined, dropping another $75,526 this year.
Feeney said retailers have told him prices of products have dropped because of a drastic oversupply in the market. Local retailers have to compete harder for consumer attention, as buyers are overloaded with too many sellers and products.
There are two dispensaries in Arlington, Eskar and Apothca.
“This industry alone had such a huge expansion so quickly that the economy couldn’t support the growth,” said Anthony Lenoir, a longtime Apothca employee. “A lot of dispensaries are shutting down as the market has become so saturated. The state just wasn’t ready for such a big boom.”
Eskar did not respond to repeated interview requests.
Oversaturation, however, doesn’t seem to be the only cause for local retail stores to see a decline in business. Since recreational courier licenses were legalized in 2020, the annual revenue for delivery services has nearly quadrupled.
In the first six months of this year, sales through online delivery services brought in $10.7 million in sales revenue, compared to $7.9 million from the same period the year before, according to the Cannabis Control Commission.
As online delivery services become increasingly popular, it isn’t a surprise that in-person stores are closing across the state, Lenoir said. These delivery businesses operate without a storefront, mimicking a business model like Amazon, where the entire operation is done online with products stored in warehouses. And the convenience of delivery is making it hard for in-person stores to compete.
When a consumer in Arlington orders cannabis products online through a delivery business based in a different municipality, Arlington does not collect that local tax revenue. Instead, the community where the delivery business is located gets the tax revenue.
There are 451 cannabis businesses operating in the state. In the first months of 2025 alone, 23 cannabis stores in Massachusetts have surrendered or let their licenses expire, according to data from the Cannabis Control Commission obtained by the Boston Business Journal.
Last year, 2.4 percent of adult-use marijuana retail licenses were surrendered. This year, the number jumped to 5.4 percent, according to data from the Cannabis Control Commission’s annual report.
The number of licenses in Arlington has not changed. The two original dispensaries remain open. There has been an interest in opening a third business, even going as far as issuing another licensing agreement for the establishment; however, progress has stalled, said Feeney.