Michigan’s Recreational Pot Sales Soar

By Kanika Ferency posted 01-06-2020 07:53


In mid-November 2019, the Michigan Marijuana Regulatory Agency informed medical marijuana dispensaries that they could begin transferring “50% of their inventory to the recreational market” as long as they have received the appropriate license from the state. A municipality may also require a locally issued license in addition to a state license. MCL 333.27956. After some patience, stores began to receive their licenses. December 1, 2019, marked the official day that the retail marijuana market became legal. During the first week, only five stores were actively selling recreational marijuana in Ann Arbor, Evart, and Morenci. Several other stores in the state have received their license to sell and are also expected to open soon.

Even though a limited number of stores opened during the inaugural week, sales were high. The first week of business brought in an estimated $1.6 million. What does that translate to for the state of Michigan? It brought in nearly $270,414 in tax revenue, including a 10% excise and 6% sales tax. The budget planners for the state are projecting recreational marijuana will become a $1 billion industry by fiscal year 2021. In comparison, Colorado generated over $683.5 million in the first year of legalization.

Though some of the initial money will be directed toward research on marijuana use in health care, the remainder is earmarked for cities that allow recreational business, counties proportioned on the number of microbusinesses and retailers, the Michigan Transportation Fund, and the School Aid Fund for K-12 education. However, most Michigan cities are still not on board. Under the Michigan Regulation and Taxation of Marihuana Act, a municipality may completely prohibit or limit the number of marijuana businesses within its boundaries. MCL 333.27956. “Nearly 1,400 of Michigan’s 1,773 cities, townships and villages [are] not allowing recreational marijuana businesses in their communities.” It will be interesting to see whether municipalities change their tune after seeing the success of the first week of sales.