In states where the recreational use of marijuana has been legalized, communities are “flying high.” In addition to creating thousands of jobs and small businesses throughout the nation, the legalization and regulation of cannabis-related products has generated billions in tax revenue that is being used to fund a wide range of projects, programs and services.
Making money from Mary Jane
The Michigan Department of Treasury announced Feb. 28 that more than $59.5 million would be distributed among 224 municipalities and counties through the 2018 Michigan Regulation and Taxation of Marijuana Act. In the days that followed, 81 cities, 26 villages, 53 townships and 64 counties received money from the Marihuana Regulation Fund for the 2022 fiscal year. In addition, $69.4 million was distributed to the school aid fund for K-12 education and the Michigan Transportation Fund, for a total of $198.4 million.
According to Cannabis Regulatory Agency executive director Brian Hanna, the money that makes its way into local coffers through the collected excised tax is an important benefit of the regulated cannabis industry. “The CRA is committed to doing our part in supporting our law-abiding licensees,” he said.
Communities use the revenue they receive in a variety of ways. This year, Emmet Charter Township in Calhoun County plans to use $600,000 of fund money to cover rising public safety and sewer costs that have created a dent in the township’s general fund. Other communities have spent cannabis tax revenue on street projects, hiring personnel and funding downtown development projects. In Kalamazoo, an MRF windfall from the 2022 fiscal year is helping create a cannabis chamber of commerce to help address the longstanding equity needs for those in the cannabis industry, including microbusinesses and minority-owned ancillary businesses. Cannabis tax income often goes to bolster county and municipal general funds as well.
For the good of the community
In March 2022, the city of Big Rapids, Mich., and Mecosta County split nearly $1.4 million in marijuana excise tax revenue, which was used to fund a wide range of projects. City commission officials in Big Rapids met and agreed that their portion of the money should be spent on visible projects that would allow residents to see the benefit of having marijuana businesses in their community.
Two months later, the city commission allocated money to its fire and police departments for new equipment; to the city park system for upgrades and improvements; and to the Department of Public Works for downtown development, Riverwalk stairs and lights and parking lot pavement projects, among others.
Paul E. Bullock, Controller/Administrator for Mecosta County, said that the $770,000 received by the county from the marijuana excise tax combined with $8.4 million received from the American Rescue Plan Act would be used on initiatives and projects that would positively impact as many county residents as possible.
“The board of commissioners looked for partnerships within the community that were doing the sort of things the county residents would benefit from and requested proposals from these agencies,” he said.
The chosen projects include the construction of the Dragon Trail, $225,000; the purchase of four generators for parks for a total of $100,000; safety equipment for first responders at a cost of $39,912; Hope House Free Medical Clinic, $50,000; child hunger initiatives, at a cost of $100,000 each year for two years; local food pantries, $100,000; and a marine boat for the Mecosta County Sherriff’s Department, $62,500. “We have not made plans for the 2022 funds yet,” he said.
A wise investment
According to the Marijuana Policy Project, legalizing cannabis has been a worthwhile and wise investment. As of March 2022, participating states reported a combined total of $3.7 billion in cannabis tax revenue. “Our report is further evidence that ending cannabis prohibition offers tremendous financial benefits for state governments. The legalization and regulation of cannabis for adults has generated billions of dollars in tax revenue, funded important services and programs at the state level and created thousands of jobs across the country. Meanwhile, the states that lag behind continue to waste government resources on enforcing archaic cannabis laws that harm far too many Americans,” said Toi Hutchinson, president and CEO of the Marijuana Policy Project.