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With cannabis retail sales beginning recently in Groton, Montville and Norwich, local towns and cities are looking ahead ― even if they’re not yet sure how much they will receive ― to how they will spend the new tax revenue.
Groton and Montville are steering their funding toward youth services and programs to help people with addiction with the revenue they expect to receive from local cannabis sales. Norwich is waiting for more information from the state before making a decision.
With the state allowing adult-use recreational marijuana, municipalities with cannabis retailers, hybrid retailers or micro-cultivators receive revenue from a 3% municipal sales tax on cannabis, according to the Office of Legislative Research.
Local officials said they can’t fully predict how much the municipalities will receive this year, particularly now that several stores in the region are competing with each other.
The Town of Groton is proposing to allocate its funding to Groton-based nonprofit Community Speaks Out, which stresses the importance of education and peer-to-peer support to prevent youths from going down the path of addiction. Montville has approved funding for youth programs and addiction services.
Municipalities can allocate the revenue towards six categories: street and neighborhood improvements near the businesses; education, youth employment, and training programs; services for people after they are released from the Department of Correction, probation or parole; services for mental health and addiction; youth service bureaus and municipal juvenile review boards; and civic engagement, according to the document.
In Groton, Curaleaf on Gold Star Highway, which previously was a medical marijuana dispensary, began selling recreational cannabis in July. Botanic Jac, LLC’s site plan for a cannabis retail store at 721 Long Hill Road, was approved in July.
Groton Town Manager John Burt said there is no way to know how much revenue the town will receive from cannabis sales in Fiscal Year 2024, but he expects it could be around $50,000.
Burt said cannabis shops send a report monthly to the state. The state provides the town a copy of the report, and the business sends the town the funds. He said the town has not yet received a report.
Community Speaks Out
The Groton Town Council is slated to vote on a resolution next week to allocate 75% of its Fiscal Year 2024 municipal cannabis tax revenue ― capped at $100,000 ― to Groton-based nonprofit Community Speaks Out.
If the council approves the resolution, it would go to the Representative Town Meeting for a vote. The town would then sign an agreement with Community Speaks Out that specifies how the money must be spent and include the town’s right to access any needed documents, Burt said.
Tammy de la Cruz, vice president of Community Speaks Out who co-founded the organization with her husband, former state representative Joe de la Cruz, said the organization would use the funding for its youth group and educational programs.
The organization’s youth group has been funded since 2021-22 by a $20,000 annual violence prevention grant through the legislature’s Black and Puerto Rican Caucus. But this year, Community Speaks Out didn’t receive funding, which went to other initiatives, Tammy de la Cruz said.
She said Groton’s funding is a “saving grace,” because the organization does not want to end its youth group for middle school and high school students.
She said the youth group, facilitated by a social worker and teacher, serves young people impacted by addiction and tries to empower them to not go down that path.
Community Speaks Out wants to grow the group to include even more students, who have addiction in their family, have lost a friend or family member, or are being raised by someone else due to addiction, de la Cruz said.
She said the group brings together kids who would have never met each other or even run in the same circles, but have learned to lean on each other.
“It’s amazing to see them be empowered and actually support each other,” she said. “The peer-to-peer support is so important.”
The money will help high-risk kids and allow the organization to get out its message to more students, as well as parents. One project is helping schools put on a play Community Speaks Out developed and other interactive activities.
De la Cruz said Community Speaks Out teaches youth that the longer they abstain from using any substance, especially marijuana, the better chance they have of not becoming addicted to other substances or marijuana.
As marijuana becomes more accessible to the public at large, she said it’s even more important to get the messaging out there.
At last week’s Town Council Committee of the Whole meeting, Town Councilor Edward Jacome introduced the funding for Community Speaks Out. He said the group helps kids who are at risk and who are living with families with members who are suffering from addiction.
“These are one of our most vulnerable populations, and I think we can’t forget that these are the ones that are suffering socially and economically,” Jacome said.
He added that the funds could allow Community Speaks Out to reach more kids, hold more events, and continue their prevention work, in the community and school system, to protect kids for generations to come.
Some councilors said they supported Community Speaks Out’s mission, but had reservations about allocating funding before the town knows how much it will receive and before soliciting proposals from other organizations.
Councilors Rachael Franco, Edward Jacome, Bruce Jones, Juliette Parker, Scott Westervelt, and Dan Gaiewski, who proposed the compromise of allocating 75% of the funding to Community Speaks Out, and Town Mayor Juan Melendez, Jr. voted in favor of moving the resolution to a vote at next week’s meeting, while Councilors Portia Bordelon and David McBride opposed.
Project Courage
The Montville Town Council has slated $200,000 of its revenues to fund youth services and Old Saybrook-based Project Courage, which provides addiction services.
The Town of Montville has collected $81,961.50 in revenue for the January to April period and is further owed $48,970.37 for the months of May and June.
But Montville Mayor Ronald McDaniel said that with the advent of two new recreational sales locations in Norwich and Groton, he is not sure where the revenue will wind up for Fiscal Year 2024.
Norwich Comptroller Josh Pothier said the city is awaiting information from the state for its first recreational cannabis retail store at 606 W. Main St., which opened on July 14.
The cannabis revenue will be placed into a special fund. The ordinance creating the fund calls for the city manager to present a resolution to the City Council on the first Monday in April with spending recommendations for the cannabis revenue for the following fiscal year.
The city manager presents his annual budget proposal at the same meeting, but the cannabis revenue will be kept separate from the general fund budget and revenues.
State sales tax
Between January and June of this year, the state has collected about $6,043,528 in taxes on cannabis, according to the state Department of Revenue Services.
In addition to the 3% municipal tax, the state collects a 6.35% sales and use tax on cannabis and an additional tax rate that depends on the type of product and how much THC it contains. For the first two years, the state sales and use tax was allocated to state agencies to cover the cost of rolling out the new law.
During the current fiscal year and until 2028, 10-15% of the sales tax will go into the state’s general fund; 25% will be used to fund substance abuse prevention, treatment and recovery and data collection and analysis. Sixty to 65% will go to a Social Equity and Innovation fund to support businesses and community investments.
Beginning in the fiscal year 2029, 25% will go to prevention and recovery and 75% will go to the social equity fund.
Day Staff Writers Claire Bessette and Daniel Drainville contributed to this report.
k.drelich@theday.com
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