Michigan’s medical marijuana market is growing beyond expectations, generating more than $42 million in sales since the first dispensary opened on Nov. 1.
In the first month of operation, when only a few licensed dispensaries were open, $7.1 million in pot sales were recorded with the state Department of Licensing and Regulation. That figure grew to $11.9 million in January and slipped slightly to $11.2 million in February, a frigidly cold month with three fewer days than January. The total for four months is $42,061,557.
In those four months, 8,670 pounds of marijuana were sold at a median retail cost for customers of $213.91 per ounce. And that translates into more than $2.3 million sent to the state from the 6 percent sales tax and $1.2 million from the 3 percent excise tax.
David Harns, spokesman for LARA, noted that with more than 294,000 medical marijuana cardholders, Michigan is the second-largest medical marijuana market in the nation.
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Michigan’s number is fairly extraordinary since the state has only licensed 54 medical marijuana dispensaries and many of those have only been open for a relatively short amount of time.
“That exceeds expectations that any of us had for the market,” said Rick Thompson, a board member of the Michigan chapter of the National Organization for the Reform of Marijuana Laws or NORML. “It’s a great sign since a significant part of the state isn’t serviced by a dispensary yet.”
The state’s voters approved medical marijuana in 2008 63-37 percent and the Legislature passed bills in 2016 to regulate and tax the industry. Voters approved a ballot proposal legalizing marijuana for adult recreational use in November 56-44 percent and the market is expected to exceed $1 billion once it expands licensing to recreational businesses early next year.
Thompson noted that not only are the sales numbers encouraging, but the impact on the economy is also noteworthy.
“When we look at the economic advantage, it goes far beyond simple tax revenues,” he said. “Businesses are being created. Jobs are being created. And there’s redevelopment happening in dilapidated neighborhoods. The advantages of cannabis legalization are far-flung and just now being realized by the state.”
The 3 percent excise tax on medical marijuana ended Wednesday. That’s because when Michigan voters approved legalizing weed for recreational use last year, state law included language that the excise tax would be eliminated 90 days after recreational weed became legal.
Both medical and recreational marijuana are still subject to the state’s 6 percent sales tax and recreational pot will also carry a 10 percent excise tax when it becomes commercially available for sale in early 2020.
Good for the state…
Now Let’s review Section 14.1 of the Marijuana Regulation and Taxation Act voted in by the people of Michigan regarding the allocation of funds.
The People of the State of Michigan enact:
333.27964 Marihuana regulation fund; creation; Administration; allocation of expenditures.
Sec. 14. 1. The marihuana regulation fund is created in the state treasury. The department of treasury shall
deposit all money collected under section 13 of this act and the department shall deposit all fees collected in
the fund. The state treasurer shall direct the investment of the fund and shall credit the fund interest and
earnings from fund investments. The department shall administer the fund for auditing purposes. Money in
the fund shall not lapse to the general fund.
2. Funds for the initial activities of the department to implement this act shall be appropriated from the
general fund. The department shall repay any amount appropriated under this subsection from proceeds in the
fund.
3. The department shall expend money in the fund first for the implementation, administration, and
enforcement of this act, and second, until 2022 or for at least two years, to provide $20 million annually to
one or more clinical trials that are approved by the United States food and drug administration and sponsored
by a non-profit organization or researcher within an academic institution researching the efficacy of
marihuana in treating the medical conditions of United States armed services veterans and preventing veteran
suicide. Upon appropriation, unexpended balances must be allocated as follows:
(a) 15% to municipalities in which a marihuana retail store or a marihuana microbusiness is located,
allocated in proportion to the number of marihuana retail stores and marihuana microbusinesses within the
municipality;
(b) 15% to counties in which a marihuana retail store or a marihuana microbusiness is located, allocated in
proportion to the number of marihuana retail stores and marihuana microbusinesses within the county;
(c) 35% to the school aid fund to be used for K-12 education; and
(d) 35% to the Michigan transportation fund to be used for the repair and maintenance of roads and
bridges.
