Connecticut cannabis operators pay three layers of tax on adult-use sales: a state excise tax, a 6.35% state sales tax, and a 3% municipal tax in participating cities and towns. Through September 30, 2026, the excise tax is based on THC content. Effective October 1, 2026, the THC tax is replaced by a flat 10.75% excise on gross receipts. All cannabis taxes are filed monthly through DRS via myconneCT. Medical cannabis is exempt from the excise and municipal taxes but still subject to the 6.35% state sales tax.

Effective January 1, 2023, Connecticut decoupled from federal 280E at the state level. Licensed CT cannabis businesses can deduct ordinary and necessary business expenses (rent, payroll, utilities, marketing, professional services) on their Connecticut state corporate or personal income tax returns, even though federal 280E still disallows those same deductions on the federal return. This is a meaningful CT-specific advantage that requires deliberate state tax planning to capture fully, and that operators in most other states do not have access to.

At the federal level, Section 280E still prevents cannabis businesses from deducting ordinary business expenses because cannabis remains a Schedule I controlled substance federally. The primary federal strategy is maximizing deductible cost of goods sold through careful accounting and documentation. Connecticut's state-level decoupling helps offset some of the federal burden but does not eliminate it, so federal 280E planning remains essential.

Effective October 1, 2026, Connecticut abolishes the THC potency-based excise tax and replaces it with a flat 10.75% excise tax on the gross receipts of cannabis sales by retailers, hybrid retailers, and micro-cultivators. The 3% municipal tax remains in addition to this new excise tax. Operators need to update their point-of-sale systems, financial reporting, and cash flow models ahead of the transition to ensure accurate reporting and pricing decisions under the new structure.

Yes. GreenGrowth CPAs understands Connecticut's social equity framework and can help qualifying businesses build the financial systems, reporting infrastructure, and compliance documentation needed to operate successfully under their license type, including tracking and reporting tied to social equity council requirements where applicable.

We serve Connecticut cannabis businesses statewide, including Hartford, New Haven, Bridgeport, Stamford, Waterbury, Norwalk, and all other markets across the state. Our services are delivered remotely with full coverage for every Connecticut operator regardless of location.