Michigan Officials Announce $290 Million In Marijuana Tax Revenue Funds For Cities, Schools And Transportation

Michigan officials announced they are distributing a new batch of more than $290 million in marijuana tax revenue to localities, public schools and a transportation fund.

The state Department of Treasury said on Thursday that 269 municipalities will be receiving $87 million, while education and transportation efforts will each get $101.6 million.

That represents another substantial increase in cannabis tax-funded disbursements that are required under the state’s adult-use legalization law. In 2022, Michigan distributed about $150 million total to the three funding buckets, for example.

The department said that 99 cities, 30 villages, 69 townships and 71 counties will be receiving payments from the Marihuana Regulation Fund over the comings days. Localities will get $59,000 for each cannabis retailer or microbusiness that operates within their jurisdiction.

“This week, many Michigan municipalities and counties will begin seeing their share of adult-use marijuana payments appear in their banking accounts,” State Treasurer Rachael Eubanks said in a press release.

“Through a partnership, the dollars received from the adult-use marijuana taxes and fees are distributed to our participating communities,” she said. “These dollars may be spent how our local units deem fit to their needs.”

The funding is made possible from tax revenue collected from legal marijuana sales in the state, which totaled more than $3 billion in 2023 alone.

State officials said last November that tax revenue from legal marijuana grew by 49 percent compared to the previous year, surpassing the amount of revenue made from alcohol sales. Marijuana sales incur a 10 percent excise tax—among the lowest rates in the nation—as well as a 6 percent state sales tax.

“The tax funding for municipalities and counties that comes from the marijuana excise tax is a very important benefit of the legal cannabis industry in Michigan,” Cannabis Regulatory Agency (CRA) Executive Director Brian Hanna said. “The CRA is committed to doing our part in supporting our licensees so that they can continue to grow the local economy throughout the state with good-paying jobs and increased revenues for local government budgets.”

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Also, late last year, CRA announced the launch of a new social equity grant program that will award $1 million to eligible marijuana businesses for education, business needs or community reinvestment.

Elsewhere in Michigan’s legal cannabis landscape, a change approved last July by the state Civil Service Commission took effect in October to end pre-employment marijuana testing for most government employees. The shift also gave people who’ve already been penalized over positive THC tests an opportunity to have the sanction retroactively rescinded.

Also in October, Michigan Gov. Gretchen Whitmer (D) signed a pair of bills into law to allow state-licensed marijuana businesses to conduct trade with tribal cannabis entities. Both took effect immediately.

Meanwhile, the Michigan Chamber of Commerce said last month that a rash of recent break-ins at legal marijuana retailers in the state underscores the need for federal cannabis banking reform, which the group says would reduce the risks of theft and fraud that stem from the industry’s current reliance on cash.