Marijuana Taxes Back to Cities, How Much Each Gets and What They’re Doing With It
(Kurt Metzger and Crystal Proxmire, March 2, 2024)
Oakland County, MI- Twelve Oakland County communities will share more than $2 million ($2,127,209) in FY23 revenue collected from the 10% recreational marijuana excise tax.
Michigan voters approved the legalization of the recreational use of Marihuana for adults 21 years of age and older. The resulting legislation known as the Michigan Regulation and Taxation of Marihuana Act (MRTMA) imposes an excise tax of 10% on retail Marihuana sales in addition to a 6% sales tax. (That’s the state’s spelling, not ours, by the way)
Each eligible municipality and county receives $59,000 for every licensed retail store and microbusiness.
With 37 marijuana businesses across the 12 communities, Oakland County will receive a separate payment of $2,186,195.
In FY22, 7 communities accounted for only 22 establishments and the county payment was $1,140,507.
Revenue was collected from 737 licensees among the state’s cities, villages and townships during the 2023 fiscal year.
The $87 million that was collected is about a 46% increase from the $59.5 million in tax revenue that was collected for the 2022 fiscal year. Oakland County’s revenue grew by 86.5 percent.
Hazel Park is home to the most dispensaries, getting $590,864 back. In a 2023 article on the same subject, councilperson Andy LeCureaux told Oakland County Times. “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 has $354,518 coming back. Mayor Raylon-Leaks May shared that “The marijuana revenue goes to support the general fund activities and is not designated for specific use. The city has a budget workshop scheduled for March 16th where the city department heads will present and our finance director will discuss city revenue sources and regional outlook.”
Walled Lake and Waterford each get $177,259. Berkley, Madison Heights, and Southfield each get $118,173.
This is the first year of marijuana revenue for Southfield. Mayor Ken Siver told Oakland County Times, “Southfield had not made plans for the $118 thousand plus dollars from the state’s marijuana funds. I am advocating that it go toward our road and sidewalk spot repair program. There is never enough money for local roads.”
Mayor Siver added that “Our three marijuana businesses are unobtrusive and trouble free. They have blended into the community.”
Madison Heights Mayor Roslyn Grafstein said the funds have made a difference in her city.
“For the past few years, Madison Heights has been able to strategically budget the revenue generated from our marihuana companies to benefit our community in a number of ways. Now that we are updating our public image and branding efforts, the third approved dispensary has provided funding for new gateway signage that is being designed by Ideation Orange, a local business based in Hazel Park,” she said.
“Donations from our marihuana businesses have been instrumental in the funding of public events and murals and they actively participate in philanthropic activities within our community. For example, they support our local food pantry and distribute turkeys during Thanksgiving, in addition to other generous contributions.
“The existing cannabis businesses in the city have also paid over one million dollars in additional tax revenue, allowing us to reduce our millage last year.
“At the request of myself, Mayor Pro Tem Bliss, Councilman Fleming and Councilman Soltis, we will allocate funds from our two newest approved dispensaries specifically for bolstering public safety initiatives, ensuring the well-being and security of our residents.
“In 2018, when I voted in favor of allowing the legal cannabis industry in the city, it was with an eye towards economic development that would clean up some of our vacant and blighted properties, boost tax revenue, and create job opportunities for our community. Now, we see that the positive impact of these businesses extends beyond the cannabis sector. The increase in employment and new business traffic translates into more people shopping and dining locally, and that supports non-marihuana-related businesses.”
At the more modest end of revenue are the Village of Lake Orion, Orion Township, Pleasant Ridge, and Royal Oak – each getting $59,086. In those municipalities this is only the first or second year.
“Orion Township uses the additional revenue for road improvements and our community foundation benefits as well. Our new police station and municipal complex have also been supported by the revenue,” said Orion Township Supervisor Chris Barnett. “The marijuana businesses in our community have been great community partners.”
As more communities add marijuana shops, including Pontiac and Holly, revenue is expected to continue to grow in both the cities and the more rural parts of Oakland County.
