As cannabis sales continue to hit new highs in Michigan, communities that embraced legal weed are reaping the rewards with an influx of jobs, tax revenue, community benefits, and renovated buildings.
The cannabis industry has seen tremendous growth since the state’s first adult-use dispensaries opened in December 2019, with sales hitting unprecedented levels year after year.
In 2023, licensed dispensaries rang up a record $3.06 billion in sales, a 25% increase over 2022.
The surge in demand for legal weed has not only transformed the landscape of the state’s economy but also revitalized communities that have allowed recreational cannabis businesses to open.
One of the most significant impacts is the cascade of tax revenue from cannabis sales. With a 10% excise tax on recreational cannabis sales, hundreds of millions of dollars have gone to local governments, schools, and roads since 2020.
The state recently sent more than $87 million to 269 municipalities and counties as part of their share of excise taxes in 2023. That includes 99 cities, 69 townships, and 71 counties.
The communities and counties each receive more than $59,000 annually for every licensed cannabis dispensary and microbusiness located within their jurisdictions.
For cities that have embraced the industry, the revenue turned into a windfall.
The city of Detroit, which is bouncing back from bankruptcy, leads the state with the most adult-use dispensaries at 33. The state sent the city a $1.95 million check for excise taxes last month.
The predominantly Black city is taking a progressive and unique approach in how it spends the funds. While some cities are using the money to supplement their general fund budget, Detroit is planning to finance initiatives aimed at addressing “the negative impact resulting from disproportionate enforcement on Detroiters during the years cannabis was illegal,” says Kim James, director of the city’s Office of Marijuana Ventures.
Abundant studies have shown that marijuana prohibition has overwhelmingly targeted Black communities with stiff jail sentences and excessive fines. One of the most detrimental impacts of marijuana convictions is the loss of employment opportunities.
The city is focusing on using the money for business development opportunities for marginalized groups, entrepreneurial programs for young people, and housing development for people affected by prohibition.
In Hazel Park, which received more than $590,000 for 10 dispensaries last month, city officials say the influx in revenue prevented a cut in services. As recreational marijuana sales were becoming legal, the city’s pension bill was rapidly rising, like those in other communities. The city used the excise tax revenue to help meet its pension obligations.
“If we weren’t able to offset some of those increased costs from cannabis monies, we would have had to make cuts in services or pass those costs on to taxpayers,” Hazel Park city manager Edward Klobucher tells Metro Times. “It’s a huge benefit. It absolutely preserved services.”
With 26 dispensaries, Ann Arbor received $1.54 million in excise tax revenues last month. Lansing got $1.42 million with 24 dispensaries, and Grand Rapids received $1.36 million in 23 dispensaries.
In addition to new tax revenues, cities also have reached agreements with cannabis businesses to provide community benefits — a perk that no other industry provides.
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