Cannabis retailers in towns and cities near state borders have long enjoyed increased customer traffic – and with it revenue – thanks either to marijuana prohibition or preferable conditions, such as lower taxes.
But recent changes to state law in certain areas, and police demonstrating a willingness to arrest buyers of state-legal cannabis, threaten to disrupt the border-town effect.
Connecticut mulls cannabis tax cut to compete with Massachusetts marijuana
In Connecticut, cannabis sales declined slightly from 2024 to 2025, from $293 million to $290 million, despite retailers ringing up nearly 1 million more individual sales, according to state data.
One possible culprit is competition from cannabis stores in Massachusetts, where lawmakers recently approved a much higher possession limit for adult-use marijuana purchasers.
That’s leading one Connecticut state lawmaker to call the situation a cannabis “arms race,” according to Connecticut Insider.
“Massachusetts has far more outlets, far less taxes,” state Rep. David Rutigliano told the outlet. “They did things a lot differently than we did here in Connecticut.”
Can a Connecticut cannabis tax cut boost sales?
According to Connecticut Insider, Connecticut lawmakers are considering changing the state’s current excise tax, which is based on THC potency, to a flat-rate tax like that seen in most other states.
That could lower Connecticut cannabis prices by as much as 11%, Ben Zachs, CEO of cannabis retailer Fine Fettle, told Insider.
That might be welcome news to existing cannabis operators in limited-license Connecticut.
Many consider Connecticut – a vertically integrated market dominated by multistate operators with few small businesses and high license fees – to have some of the country’s most challenging regulations.
Will police arrest you for a legal cannabis purchase?
Elsewhere, cannabis retailers in border towns pose challenges and risks for customers.
In Indiana, police arrested a Chicago man who’d made a large purchase at a legal marijuana store in Michigan, according to the Times of Northwest Indiana.
According to the Times, police arrested Durand Ambrose after he’d made a legal purchase in Michigan.
During a traffic stop, police saw cannabis in packaging from a nearby legal cannabis store. Ambrose reportedly told law enforcement he’d made the purchase of 241 grams at a legal store for personal use.
However, because cannabis remains illegal in Indiana, he was arrested and charged with a felony, the newspaper reported.
And similar arrests could happen in Ohio, despite the state’s $1 billion-dollar legal adult-use cannabis industry.
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Should Michigan cannabis stores market to Ohio residents?
That’s because the recent overhaul of state cannabis laws that restricted hemp THC also banned legal cannabis purchased from out of state, as Fox-8 reported.
According to a Fox-8 analysis, a resident of central Ohio could save nearly $80 by driving to unlimited-license Michigan to purchase cannabis rather than shop in Ohio, where there’s a license cap.
That’s even accounting for fuel costs.
But Senate Bill 56 means that Ohio residents who may be lured to purchase cannabis in Michigan, where the product is much cheaper, run the risk of arrest.
It’s not yet clear whether that’s enough to discourage cross-border purchases.
According to Fox-8, there are 204 adult-use cannabis dispensaries in Ohio, with state law limiting retail locations to a total of 400.
Michigan boasts 831 cannabis retailers, the station reported.
