Meriden nets $300,000 in recreational Cannabis revenue since legalization 18 months ago
Meriden Crafts Plan to Allocate Over $300K in Cannabis Tax Revenue for Community Reinvestment.
City officials are crafting a plan to help it spend the more than $300,000 it collected in cannabis tax revenue during the 18 months legalized recreational pot sales were in place in Meriden.
"The city budgeted a conservative figure of $180,000 in revenue for fiscal year 2024 because this was a new revenue program and it was impossible to predict total gross sales without having any prior data to work with," Finance Director Kevin McNabola stated in an email. "For fiscal year 2025, again we budgeted a conservative figure of $300,000."
In all, Zen Leaf on East Main Street and Rejoice dispensaries generated $11.8 million in sales citywide, McNabola said. Sales have since tapered off from a high mark this spring partly blamed on a flower shortage, higher prices and more out-of town options.
Meriden was among the first cities to open a dispensary after the adult-use cannabis market kicked off in January 2023. Zen Leaf, formerly known as Willow Brook Wellness, was a relatively quick conversion from a medical cannabis dispensary to a hybrid retailer. Rejoice opened earlier this year on Broad Street near the 1-691 interchange.
Meriden's dispensaries are surrounded by the towns of Southington, Wallingford and Cheshire, that have prohibitions on recreational cannabis, giving the city an advantage in generating tax revenue, jobs and traffic generation.
The 3 percent municipal tax revenue collected on adult-use recreational cannabis sales was offered by the state as an incentive to municipalities to host dispensaries. Meriden has passed zoning provisions to allow three retail dispensaries, three micro-cultivation facilities and three large production facilities. It does not have any small or large production facilities.
According to state law, revenue from the municipal cannabis tax becomes a part of the municipality’s general revenue and must be used for designated purposes, including streetscape improvements and neighborhood developments, education or youth employment or training programs, and services for formally incarcerated individuals
Prior to legalization, the state's Social Equity Council identified the city as a community negatively impacted by the War on Drugs.
Earlier this spring Mayor Kevin Scarpati and Economic Development Director Joseph Feest met with council representatives about crafting a plan for community reinvestment. This work is separate from the Social Equity Council's strategy to reinvest its state revenues back into affected communities. That work was recently halted after state officials called for an audit of the council's $22 million community reinvestment program. The audit should have no impact on the city's program.
City officials sought guidance crafting a reinvestment program that aligns with community needs and state requirements.
"We wanted to review state mandates on how the money is to be spent," Scarpati said. "We asked (city) staff to evaluate our options and come up with a plan. I don't think anything has come before the (City) Council."
Scarpati wants to include programs that encourage engagement with youth and the school system.
"An educational component is important and would be a healthy investment," Scarpati said. "We need to be educating youth and adults about the laws and restrictions, particularly around driving. We want to prevent as many DUI's as possible. And we need a substance abuse program."
