Cannabis cultivators take great care. Transferring a seedling from its mother plant to new pots. It joins its siblings in a highly-controlled room. Twelve hours of light, 12 hours of darkness. Its vegetative state is critical to its maturation. Temperature, humidity and airflow are tightly monitored.
The weeks-long result is pounds and pounds of marijuana buds, set to be flash-frozen, dried or distilled for consumption. There’s no doubt the process mimics vertical indoor vegetable farming.
But is cannabis agriculture?
In June, a Circuit Court in Cass County ruled that it was, potentially creating a legal frenzy of Michigan growers seeking to overturn a common property classification in hopes of saving thousands of dollars in their annual tax bills in 2024 and beyond.
Local municipalities have always classified cannabis properties across the state as industrial or commercial properties. The reason is simple: Most indoor grow operations set up shop inside former industrial buildings — and by maintaining the industrial use classification, those occupying the property pay the common taxes, including school millages. Properties categorized as agriculture, however, are exempt from paying school mils and other local taxes.
“It’s a nuanced area of property law,” said Ben Sobczak, partner at Detroit law firm Dickinson Wright PLLC and former chief legal officer for vertical marijuana company Pleasantrees. “But it’s big money for operators. And, until now, no one has really fought it because the local municipality has the leverage on your permits. Challenge them and they may not renew your permit to operate next year.”
Due to the result of the case in Cass County, experts believe a horde of new lawsuits will crop up as cannabis operators look to shrink their tax bills as profits remain fickle due to low prices across the state’s industry.
To read more, click on Crain’s Detroit