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“Where are all the taxes going from the [marijuana] dispensaries? … How much $$$ has the city made so far? What’s it going towards?”
— Ray Cote
Dozens of people of all ages and walks of life spill into New Bedford’s dispensaries on a Friday night. Some come to relieve their pain, while others look for recreation. It’s all part of what has made Bristol County the third highest county for marijuana sales in Massachusetts since 2020.
This is the latest installment of a series that answers questions about what’s going on in New Bedford. Ask the Light your question here and our reporters will look into it for you.
New Bedford dispensaries have collected over $15.6 million between November 2024 and July 2025 on marijuana and cannabis products, according to The Light’s review. But one reader asks, Where are all the taxes going from the dispensaries? How much money has the city made so far?
Since imposing a 3% local tax on marijuana sales Oct. 1, 2024, New Bedford has collected more than $470,000 in marijauna tax revenue, as of the city’s 2024 fiscal year ending on June 30. One-third of these taxes support benefits for retired city employees, while the rest goes into a pool used to stabilize the budget.
Marijuana taxes are collected from the city’s three dispensaries — Ascend Cannabis, Northeast Alternatives, and CANA — by the Massachusetts Department of Revenue (DOR). At the end of each fiscal quarter, the department distributes the local tax revenue back to New Bedford.
Approximately $157,000, or a third of the local revenue, went to the city’s Other Post-Employment Benefits (OPEB) trust fund. This fund supports retired city employees’ health and life insurance, health care, prescriptions, and sometimes disability and long-term care services. Funds like this one have been underfunded by cities across the state for decades, according to a MassINC Policy Center study published in March.
That same study said, “OPEB is growing each year, and at a far faster rate than municipalities can manage.” Just last year, the City Council transferred over $2.5 million to the trust fund to help prepare for what the city’s Chief Financial Officer Bob Ekstrom called, “the next pension crisis.” (The Light reported in May on the city’s growing pension obligations, the largest item in the city budget.)
The other roughly $313,000 collected by New Bedford’s marijuana tax is used in a pool called “free cash.” This is money certified by the Department of Revenue as unneeded for bills, enabling it to be used freely for “financial flexibility and stability,” according to Jon Darling, public information officer for the City of New Bedford.
Darling explained in a statement that free cash “is one of the factors the credit agencies look at when setting the City’s bond rating,” and he pointed towards New Bedford’s AA “positive” and AA- “stable” ratings from the S&P Global in 2023.
Free cash expenses included almost $800,000 used to purchase waste collection and disposal services. Another $42,000 went to compensate a worker who sued the city. And $368,000 went into the OPEB trust fund — which is designated to receive at least 10% of all free cash annually.
Free cash often comes from leftover money in the city’s budget. Once the marijuana tax revenue is in the pool, it is mixed with money from other sources. That money together funds these expenses.
Zakary Sarkarati is a summer intern with The New Bedford Light, as part of the South Coast Internship program, designed for local students.
Since John Mitchell was elected to office the city budget has grown over $300 Million Dollars and with his expansion of city government, as soon any revenue comes in, it is already spent. Year after year we have seen our taxes go up and right after this year’s election the city tax rate will be set and once again we will see increases to our tax bills. Enough is enough, the mayor’s vision is not working, and it’s time for new leadership in City Hall.
To be fare, I would need compare budget growth with other cities. I am sure your own person budget has grown with all the biden and trump-inflation policies. NB Light jump on it lol
Sure inflationary growth is something everyone must deal with, but most of have the common sense to watch our budgets and make the necessary cuts to run our households and businesses that want to remain open do the same thing.
I urge you to go back and look at past administrations, I did, and no other administration in the history of our city ever grew the budget like John Mitchell (over 300 Million Dollars).
Year after year taxpayers pay the price for an administration that relies on state aid, has not built the private business sector to contribute to the tax base, spends every dime of revenue that comes in, and still continues to expand city government.
100% this is just failed economic and financial leadership. I stand by comments and truly believe New Bedford needs new Leadership in City Hall.
Business? Didn’t want to expand the airport. History has shown that mid size cities that expanded their airports, when the federal funding was available of course, grew their business, and faced economic downturns much better. Cities that didn’t get their opportunities from, sludge, trash, incinerators, and receiving hazardous chemicals ..sound familiar yet?
The free cash from mj sales should be used to improve our city public transit (SRTA), which consistently cuts routes and is actually paying for a non-functional tracking app. This app was started a few years ago and has never worked well, and currently works not at all. The city bus doesn’t even connect to our airport, a major regional transportation hub connecting the city to the islands and the state capitol. SRTA also frequently detours routes without notification to riders, and changes routes to be less accessible to residents.
The tex revenue should also be used to build more housing, since the city is in a severe deficit and has a mandate to increase the number of unites in the city.