Weed in the NewsMichigan Allocates $10 Million in Tax Revenue to Over 100 Communities with Recreational Dispensaries

March 12, 2021

 

The Michigan Department of Treasury is allocating nearly $10 million to over 100 communities in the state. This is part of the state’s Regulation and Taxation of Marijuana Act.

 

The Michigan Regulation and Taxation of Marihuana Act, an initiative that was passed in November 2018 and went into effect in December 2018, aims to legalize cannabis in the state.

This initiative allows adults who are at least 21 years old to have up to 2.5 oz of cannabis in their possession and to produce up to 12 plants at home. Additionally, it also charges a 10% excise tax on every transaction of recreational marijuana.

 

Legal sales of recreational cannabis started in late 2019, so 2020 is the first full year of recreational cannabis being legally sold in the state — two years after the initiative was passed.

In 2020, adult-use marijuana exceeded $341 million in sales in Michigan. When combined with the sales made by medical cannabis, the total number fell just shy of $1 billion — $989,642,000, to be exact. Over $31 million was also collected from the 10% recreational cannabis excise tax.

 

According to the state, when the revenue from the excise tax is combined with other fees, a total of $45.7 million is now available for allocation from the Marihuana Regulation Fund.

About $10 million was distributed to 38 cities, 7 villages, 21 towns, and 38 counties where there are licensed recreational marijuana retail stories and microbusinesses. Based on the state’s 2020 fiscal year, this means that the eligible municipalities and counties will receive compensation of about $28,000 for every licensed business.

Aside from the $10 million distributed to communities with licensed recreational marijuana businesses, the state will also allocate $11.6 million to the School Aid Fund for helping the K-12 education system and another $11.6 million to the Michigan Transportation Fund for improving and creating new roads.

The remaining $12.5 million will be utilized to cover the state’s startup and other administrative costs for managing the recreational adult-use marijuana system.

 

Despite the Michigan Regulation and Taxation of Marijuana Act, not all 1,764 communities in the state allow the sales of adult-use marijuana. In fact, only fewer than 100 have permitted this.

Detroit, in particular, has not yet permitted recreational dispensaries, but starting in January 2021, the city is beginning to accept applications for them.

On a national level, not all states have legalized the use of marijuana. Out of all the 50 states, only 36 have permitted the medicinal use of marijuana, and only 15 have made it completely legal — whether the purpose is medicinal or recreational.

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