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Marijuana Taxes Are Being Distributed. Here’s How Oakland County Communities Fared

(Kurt Metzger, March 7, 2023)

Oakland County, MI – Recreational Marijuana funds collected under the Michigan Regulation and Taxation of Marihuana Act (passed in 2018) are distributed, upon appropriation, as follows:

  1. 15% to municipalities in which a marijuana retail store or a marijuana microbusiness is located, allocated in proportion to the number of marijuana retail stores and marijuana microbusinesses within the municipality.
  2. 15% to counties in which a marijuana retail store or a marijuana microbusiness is located, allocated in proportion to the number of marijuana retail stores and marijuana microbusinesses within the county.
  3. 35% to the School Aid Fund to be used for K-12 education.
  4. 35% to the Michigan Transportation Fund to be used for the repair and maintenance of roads and bridges.

The Michigan Department of Treasury announced  that Michigan communities that allow recreational marijuana sales within their borders will share $59.5 million in tax revenue for the 2022 fiscal year. In total, there was $198.4 million available for distribution from the Marihuana Regulation Fund, a 15% increase from the year prior. Nearly $70 million was sent to the School Aid Fund for K-12 education, and $69.4 million went to the Michigan Transportation Fund.

Oakland County had a total of 22 recreational businesses, operating in 7 communities, in FY2022.  This was up from 14 businesses in 4 communities in FY2021.  The county received $1,140,506.62 in marijuana tax revenue in FY2022, a 44 percent increase over FY2021’s total of $790,348.  The FY2020 allocation was $196,009.

The attached chart shows tax revenue received by each of the 7 Oakland County communities since tax revenue distribution began in FY2020.

Hazel Park has led the way, bringing in $84,004 in 2020, $338,720 in 2021, and $414,730 in 2022. Ferndale is next with $259,206 in 2022. Walled Lake’s share went down from last year – bringing in $169,360 in 2021 and dropping to $155,524 in 2022. Madison Heights also saw a slight decrease. They tied with Oxford bringing in $103.682. This was the first year for the Village of Lake Orion and Pleasant Ridge, both of which brought in $51,841.

Here’s how some of the communities are using the revenue coming from the marijuana businesses:

LAKE ORION

The Village of Lake Orion allows for two marijuana shops along M-24, not in the downtown area. So far, LIV has been the only one operating, though a second is going through the process with the Planning Commission.

Lake Orion Village Council President Jerry Narsh has seen the process both as a government official and as law enforcement. Narsh is the former Police Chief in Lake Orion, and currently is Police Chief in the Village of Holly. When asked if marijuana sales have brought any challenges, he told Oakland County Times “To date, there have been no reports or incidents of criminal activity connected to the licensesed establishment and the police department reports no increase in juvenile possession of marijuana, or Operating a Vehicle While Intoxicated/Drugs. This is a similar finding in most communities that have adult use dispensaries. ”

Narsh added “People who oppose the law do need to understand, it is a Michigan lawful business, passed by voters and regulated by the state of Michigan. We have found that most businesses owners and staff know there is a stigma attached to them and the operation. As a result, they tend to be some of the best businesses at following regulations and strictly follow law and procedures to ensure they are not a community menace. You might say they have several million reasons to be one of our best businesses in the community. In addition, this dispensary has pledged a one-time allocation of $38,000.00 for community and civic improvement. I am looking into the designated use of these funds for the Village, and would expect the pending licensee has a similar arrangement.”

In addition to the tax revenue sent to Lake Orion by the state, the village also benefits from a $5,000 annual license renewal fee. The fee and the tax funds go into the village General Fund, which supports most, if not all village services.

HAZEL PARK

Hazel Park is home to Shango, Skymint, Breeze and New Standard Dispenseries. Councilperson Andy LeCureaux said “The cannabis businesses, for the most part, are involved in giving back to the community they are part of. There really hasn’t been much of a downside unless folks are just against it and don’t like it.” We asked LeCureau what the city was using the marijuana tax funds for. “I wish it was more exciting and fun,” he said, “but all of the revenue received from cannabis sales is earmarked for the retirees’ pension and healthcare.”

FERNDALE

In Ferndale, there are six licenses in the city, with businesses like Green Buddha, LIV, and Gage Cannabis among the retailers. “Initially, City Council authorized to allow three licensed retailers to operate in Ferndale, Council has since increased and capped this number to six. To date, our city staff have not observed any serious negative impacts from the businesses within our city,” said City Manager Joe Gacioch. “These new revenues have back-filled some of the revenue fluctuations that we’ve observed since the onset of the pandemic.”

For more marijuana-related stories on Oakland County Times, click HERE.

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