State sending $10M from recreational pot sales to local governments

Marijuana in MI

LANSING, Mich. (WOOD) — The state has started doling out tax revenue collected from recreational marijuana businesses, splitting up nearly $10 million and sending it to local governments around the state.

The Michigan Department of Treasury says each of the 38 cities, seven villages, 21 townships and 38 counties will get about $28,000 for each shop within their borders.

More than $341 million in recreational marijuana sales was reported for the 2020 fiscal year, the Treasury said. Michigan collected more than $31 million in tax revenue, plus fees that brought the total income to $45.7 million.

Some of that money is required by law to pay for the Marijuana Regulatory Agency and some of it goes to help fund clinical trials about the use of medical marijuana among veterans. Those start-up costs took about $12.5 million this time.

The state keeps 70% of the remainder to be split equally between funding K-12 schools and the upkeep of roads and bridges. This time around, each of the funds got $11.6 million.

The other 30% goes to the local governments.

Municipalities with recreational marijuana dispensaries in Kalamazoo County will split more than $700,000. Kalamazoo Township alone will receive about $112,000.

This graphic shows the total amount of money sent to both local municipalities and the county government in each West Michigan county. Click on the image to see a breakdown of how much money each received.

The first cannabis dispensary to begin adult-use sales in the county was KKIND in March of 2020. General manager Joe Keck says the shop saw a big rush when it opened and continues to see strong demand. The taxes are collected on each transaction and sent to the state.

“Adult-use taxes are a total of 16%. Medical is your 6% sales tax. Our point-of-sale system does automatically calculate those numbers for us,” Keck explained.

Township Manager Dexter Mitchell said he plans to discuss options for using the revenue at the board meeting scheduled for Monday night. It could be used for a variety of programs from supporting the fire department to providing new township services.

The money is a boon at a time when other sources of funding for local governments, like sales taxes that tanked because of the pandemic, have dropped.

“That $112,000 in revenue is equivalent of about an $11 million taxable value project in Kalamazoo Township,” Mitchell said.

Michigan voters passed a ballot proposal legalizing recreational marijuana in November 2018 and legal sales started Dec. 1, 2019.

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