Michigan communities with recreational marijuana dispensaries to split $10M in tax revenue

It’s payday for communities in Michigan that allowed recreational marijuana dispensaries to open.

The Michigan Department of Treasury is doling out nearly $10 million this week to more than 100 municipalities and counties from excise taxes generated from recreational cannabis sales in the 2020 fiscal year. For each dispensary, a community will receive about $28,000.

The money will be distributed to the 38 cities, seven villages, 21 townships, and 38 counties where recreational cannabis businesses are located.

“The revenue generated from marijuana taxes and fees is important to our local governments,” state Treasurer Rachael Eubanks said in a statement Thursday. “In this extraordinary time, our staff is working to get those payments to impacted municipalities and counties. Every dollar helps now.”

The excise tax also generated about $11.6 million for schools and $11.6 million for roads. The remaining $12.5 million will be used to cover the state’s start-up and administrative costs for operating the adult-use marijuana system.

“Infusing over $28,000 per retailer and microbusiness into local government budgets across the state is very impactful and shows how strong and successful the industry is becoming," said Andrew Brisbo, executive director of the state's Marijuana Regulatory Agency.

With 22 dispensaries, Washtenaw County will collect the most money from excise taxes – more than $616,000. Ann Arbor, with 17 dispensaries, will receive more than $476,000. Bay County will collect more than $420,000 for its 15 dispensaries.

Despite the allure of new tax revenues, fewer than 100 of the state’s 1,764 communities permit recreational marijuana sales.

The cash-strapped city of Detroit won't receive any of the 2020 money because it has not yet allowed recreational dispensaries to open. Beginning in January, Detroit finally began accepting applications for recreational dispensaries.

Recreational marijuana sales totaled more than $341 million in the fiscal year 2020, which ran from Oct. 1, 2019, to Sept. 30, 2020. The adult-use market launched on Dec. 1, 2019.

Unlike medical cannabis, recreational marijuana has a 10% excise tax and a 6% sales tax. Excise tax revenue goes to local governments, schools, and roads.

In 2019, the Senate Fiscal Agency projected recreational marijuana would rack up $150 million in sales and excise taxes in the 2020-21 fiscal budget, which began in October. By 2022-23, the agency estimates the tax revenues will reach $262 million.

Since the sales of recreational marijuana became legal in December 2019, more than 175 recreational dispensaries have opened.

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