Michigan Sends $150 Million In Marijuana Tax Dollars To Cities, Schools And Transportation Fund As Officials Approve First Social Consumption Site
Michigan officials on Thursday announced that they will be distributing nearly $150 million in marijuana tax revenue, divided between localities, public schools and a transportation fund. And separately, regulators have approved the state’s first licensed cannabis consumption lounge, which is set to open this month.
The state Treasury Department said that the new funding, made possible from tax revenue generated from the state’s adult-use cannabis program, includes $42.2 million for 62 cities, 15 villages, 33 townships and 53 counties.
That’s more than four times the level of funding that the state paid out to municipalities with cannabis tax dollars last year.
Adult-use marijuana payments of more than $42.2 million will be distributed among 163 MI municipalities and counties as a part of the Michigan Regulation & Taxation of Marijuana Act: https://t.co/hlw8YHXfsG. @SBAM @MItownships @SmallBusinesses #Marijuana pic.twitter.com/StllSLUM3M
— Michigan Department of Treasury (@MiTreasury) March 24, 2022
Each eligible jurisdiction will therefore receive more than $56,400 “for every licensed retail store and microbusiness located within its jurisdiction,” the department said in a press release. There are currently 374 cannabis licensees in the state.
Last year, the eligible jurisdictions received about $28,000 per licensed retailer and microbusiness operating in their area.
More than $42.2 million will be distributed among 163 municipalities and counties as a part of the Michigan Regulation and Taxation of Marijuana Act. Next week, 62 cities, 15 villages, 33 townships and 53 counties will be receiving payments from the Marihuana Regulation Fund. https://t.co/3YKhM7EARj
— Andrew Brisbo (@AndrewBrisbo) March 24, 2022
“The Michigan Department of Treasury will distribute these dollars as soon as practical to eligible local units of government,” State Treasurer Rachael Eubanks said. “The doubling of this year’s payment amounts will have a larger impact on local government budgets.”
Meanwhile, another $49.3 million will go to the School Aid Fund for K-12 education and $49.3 million will support the Michigan Transportation Fund.
“It’s rewarding to see that the agency’s balanced regulatory approach is effectively protecting consumers while still allowing Michigan businesses to grow and thrive,” Andrew Brisbo, executive director of the Marijuana Regulatory Agency, said. “The funding provided directly to local governments—and the thousands of jobs created across the state—show that Michigan is leading the way in the cannabis industry.”
All told in 2021, Michigan saw $1,311,951,737 in marijuana sales for adult-use and $481,225,540 for medical cannabis. In December alone, there were more than $135 million in recreational cannabis purchases and about $33 million in medical marijuana sales.
Meanwhile, regulators have approved the state’s first-ever social consumption site for adult-use marijuana in Hazel Park. It stands to reason that, as that sector of the marijuana industry grows, even more tax revenue may follow.
“It’s great to see this part of the cannabis industry taking off after nearly two years of delay due to the pandemic,” Brisbo told Marijuana Moment. “As we continue to lead the nation in innovation, we’re committed to staying in touch with licensees and stakeholders to make sure we are stimulating business growth while preserving safe consumer access to cannabis.”
Nowfal Akash, chief information officer of Trucenta, which will operate the newly approved Hot Box Social, said in a press release that the business’s “plan is to first use the space for corporate, social, and special events.”
“Come summer, we’ll start scheduling events so the public can experience Hot Box Social with consumption-friendly activities like social gatherings, educational opportunities, and arts-focused activities,” Akash said. “Our hope is that Hot Box Social will be used to bring a new experience for companies hosting brainstorming meetings, friends who are gathering for private parties, and one-of-a-kind fundraisers to raise money for nonprofit organization.”
Michigan isn’t the only state that’s collecting significant tax revenue from legal marijuana sales and working to put those dollars to good use.
Massachusetts is collecting more tax revenue from marijuana than alcohol, state data released in January shows. As of December 2021, the state took in $51.3 million from alcohol taxes and $74.2 million from cannabis at the halfway point of the fiscal year.
Illinois also saw cannabis taxes beat out booze for the first time last year, with the state collecting about $100 million more from adult-use marijuana than alcohol during 2021.
That state is dedicating portions of tax revenue to mental health services, as well as local organizations “developing programs that benefit disadvantaged communities.” In July, state officials put $3.5 million in cannabis-generated funds toward efforts to reduce violence through street intervention programs.
States that have legalized marijuana have collectively garnered more than $10 billion in cannabis tax revenue since the first licensed sales started in 2014, according to a report released by the Marijuana Policy Project (MPP) in January.
California officials announced in June that they were awarding about $29 million in grants funded by marijuana tax revenue to 58 nonprofit organizations, with the intent of righting the wrongs of the war on drugs. The state collected about $817 million in adult-use marijuana tax revenue during the 2020-2021 fiscal year, state officials estimated last summer. That’s 55 percent more cannabis earnings for state coffers than was generated in the prior fiscal year.
Nearly $500 million of cannabis tax revenue in Colorado has supported the state’s public school system. That state brought in a record $423 million in marijuana tax dollars last year.
Back in Michigan, another Michigan city this week moved to decriminalize psychedelics like psilocybin and ibogaine as activists continue to pursue a broader statewide policy change to legalize the entheogenic substances through the ballot. Detroit and Ann Arbor have also enacted psychedelics decriminalization, while Grand Rapids lawmakers have expressed legislative support for the reform.
The latest city to enact the policy change is Hazel Park, coincidentally the same city that will be host to the state’s first marijuana consumption lounge.
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