On March 24, 2022, the Michigan Marijuana Regulatory Agency (MRA) announced record-breaking sales numbers in Michigan’s adult-use industry for the previous year. In just the second full year of licensed adult-use marijuana operations, the MRA reported that sales of adult-use marijuana exceeded $1.1 billion for fiscal year 2021.
Local governments are set to receive tens of millions of dollars thanks to the revenue-sharing provisions in the Michigan Regulation and Taxation of Marihuana Act (“MRTMA”). The MRTMA establishes a 10% excise tax on the retail sale of adult-use marijuana. Excise tax revenues are dedicated to Michigan schools and roads, and a significant portion is distributed to local municipalities and counties that have adult-use marijuana retailers and microbusinesses in their jurisdictions.
In total, $42.2 million will be distributed among 163 municipalities and counties in Michigan with each municipality and each county receiving $56,400 for every licensed retailer and microbusiness located in the jurisdiction. Unlike local licensing fees, which are capped at $5,000 per license and must be used to offset local costs attributable to facilities, there are no specific limitations on the use of excise tax revenues. Local communities have the opportunity to use these funds to improve the quality of life for their residents, such as by investing in parks, infrastructure, or by simply providing an additional source of supplemental funding to existing government operations.
In addition to the funds that flow to local units of government, an additional $49.3 million will be sent to the School Aid Fund for K-12 education and another $49.3 million will be sent to the Michigan Transportation Fund.
“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,” said MRA Executive Director Andrew Brisbo.
Dykema’s Cannabis Industry group is proud of the work that we have done and continue to do on behalf of our clients to support the continued growth of the Michigan cannabis industry. We are grateful for the opportunity to serve our clients as they continue to invest and create jobs in communities across the State of Michigan. We look forward to seeing our clients and the Michigan cannabis industry have yet another record-breaking year in 2022.