This spring, Michigan schools, municipalities, and transportation projects will get over $150 million in additional funding, thanks to the legalization of marijuana.
Michigan’s burgeoning cannabis business raked in a record $1.8 billion in combined adult-use and medical sales last year, bringing in roughly $250 million in increased tax income for the state. Around $115 million of the money went to the state’s general fund, while roughly $150 million went to an excise fund that would be split among schools, transportation, and specific cities and towns.
Weed Taxes For Schools, Roads and Opt-In Cities
The state Treasury Department stated last week that $49.3 million in cannabis tax money would be distributed to the state’s School Aid Fund for K-12 education. In addition, the department will deposit an equal amount of weed revenue into the state Transportation Fund, which will allocate the funds to towns and communities in need of road and infrastructure maintenance.
This year, Michigan towns and cities that have elected to allow legal marijuana companies on their land will also get a sizable payment. Every licensed cannabis retail store and micro business that operates within the authority of a municipality that has opted in to the legal pot market will get $56,450. The state will distribute $42.2 million in tax income to 163 municipalities in total.
This year, counties, municipalities, and cities that have approved local weed businesses are generating twice as much excise income as they were in 2021. The state only gave out about $28,000 each licensed store or microbusiness last year. However, because 59 new areas joined the weed market in 2021, the total compensation is four times higher than the $10 million paid out in 2020.
Cannabis Industry Is Booming
“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,” said Andrew Brisbo, executive director of the Marijuana Regulatory Agency, to Marijuana Moment. “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.”
Cannabis tax revenue is assisting adult-use states such as Michigan in funding critical social services at a time when the pandemic has slashed state budgets significantly. Several states, including Illinois and Massachusetts, now generate more tax revenue from marijuana than from alcohol, and heavily taxed markets like California generate nearly a billion dollars in pot tax revenue each year. Adult-use states have collected more than $10 billion in weed taxes since 2014, when Colorado and Washington began selling legal recreational marijuana.
Most states use these taxes to fund school, health, and transportation programs, but Alaska has invested half of its pot taxes in inmate reentry programs. Illinois has used cannabis revenue to fund expungement and social justice projects, and some cities are attempting to use this new source of revenue to fund reparations or universal basic income programs.
