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The open sign at Stoned Goat Cannabis, a dispensary in Osseo. Lauren Bixler | Circulation Manager
As Coldwater took $757,000 in pot taxes, Hillsdale councilmen stand by bans on the drug
Members of the Hillsdale City Council say they remain opposed to the opening of marijuana dispensaries as Michigan Gov. Gretchen Whitmer proposed a new 32% wholesale tax on marijuana to raise funds for statewide road repair.
“After voters legalized marijuana, the industry has grown exponentially thanks in part to Michigan’s industry-friendly taxes, the fourth-lowest in the nation,” Whitmer’s office said in a Feb. 10 statement.
The tax would come on top of a 10% excise tax and 6% sales tax already levied on marijuana purchases. A portion of the revenue from the excise tax is passed down to localities where the sales were made. The City of Coldwater — a city with about twice the population of Hillsdale — received $757,000 in tax revenue from marijuana sales in the 2024 fiscal year.
But Hillsdale has declined to permit the use or sale of marijuana in city limits since the state legalized the drug in 2018. A statewide ballot initiative passed that year legalized the recreational use and possession of marijuana for adults 21 years and older, as well as enacting a tax on marijuana sales. In response to the initiative, the Hillsdale City Council passed two ordinances in December 2018: one prohibiting the sale and use of marijuana in a public place, and the other prohibiting the establishment of dispensaries within city limits.
“The state withholds funds from us. They say, ‘Hey, we have this pile of cash, and all you have to do is promote vice within your city limits,’” Hillsdale Acting Mayor Joshua Paladino said. “In the old view, the state was supposed to punish wickedness and vice and promote virtue. And under our current state, you get rewarded for promoting and legalizing vice.”
The tax revenue from marijuana sales is significant, City of Coldwater City Manager Keith Baker said.
“We’re in our third or fourth year of receiving funds from the state,” Baker said. “We also collect a $5,000 licensing fee every year from each of these establishments, which brings about another $60,000-$70,000, depending on licenses that year.”
Baker said the Coldwater City Council dedicated the initial year’s worth of marijuana revenues to park projects. He said these projects would not have come to fruition so quickly without the additional funds, or, at least, it would take a long time to find room in the budget to save up for them.
Paladino said there is not currently a push for allowing the sale of the drug in Hillsdale, but if citizens wanted to change the ordinances, the council would have to consider the risks and benefits of permitting dispensaries to open within the city.
“With $100,000 you could end special assessments, and then you would have to think, ‘What does that do for the character of our citizenry?’” Paladino said. “Are more people then able to own their homes, stay in their homes? Are they able to avoid foreclosure because their taxes are lower? Are families able to own more homes to raise their children better if their taxes are lower? So there is a real tradeoff I think we have to consider here.”
As alluring as the marijuana tax revenue looks to Coldwater, Baker said the city anticipates a limit to the revenue in coming years.
“There’s a lot of marijuana produced so that creates a low price point,” Baker said. “And the market is only so big for it, so they’re gonna see a sales plateau. It’s not going to always be an increasing market.”
Al Williams, who is running for chair of the Michigan Democratic Party and is also president of the Detroit dispensary DaCut, said Whitmer’s 32% tax does not consider the trade-off — higher taxes will make the product more expensive and will likely end in the closure of dispensaries that are already struggling to profit.
“I think this increase actually would encourage more people to operate in the black market,” Williams told Bridge Detroit last month. “There are other ways to fix the roads.”
Will Morrisey, a former politics professor who has served on the Hillsdale City Council since 2016, said money was part of the council’s conversation in 2018 but the city’s final decision met with the approval of parents who want to limit the exposure of their children to marijuana.
“We were of course aware that revenues derived from such businesses are substantial, but monetary considerations are secondary to the character of life in the town,” Morrisey said.
Ashley Davis, chief administrative officer of the Stoned Goat Cannabis Company — a dispensary in Osseo — said marijuana’s benefits outweigh its harms.
“One of the biggest reasons people turn to cannabis is an alternative to traditional medications, especially opioids and painkillers,” Davis said. “We see so many customers looking for natural ways to manage pain, anxiety, and sleep issues without the risk of side effects often caused from prescription medications. For a lot of people, cannabis has helped them cut back or completely stop using pharmaceuticals.”
Davis said Stoned Goat focuses on education and transparency and does so by having knowledgeable employees who can adjust the cannabis needs to each customer.
“You won’t get that type of education from the black market,” Davis said.
Baker said some officials in Coldwater are concerned because of instances of people driving under the influence of marijuana. Because law enforcement officers have no easy way to measure marijuana’s percentage in the body, such as how breathalyzers measure blood alcohol content, that makes it difficult for prosecution or determining whether or not somebody has enough of the drug in their system to classify them as being under the influence.
Professor of Economics Gary Wolfram said he considers economist Ludwig von Mises’s arguments about prohibition as a model for the government’s role in marijuana legalization.
“Mises argues that prohibition is going to fail,” Wolfram said. “Cocainism, morphinism, and alcoholism are all pernicious vices and you shouldn‘t consume these things. But once you allow the government to preclude you from purchasing something that harms yourself, where does it end?”
In response to Mises’s argument, Paladino said the issue of legalization concerns more than the individual.
“When they’re advertising it, and your children see it, you don’t actually have full control over the moral formation of your children when it’s being blasted at them as normal from an early age,” Paladino said.
He also said there is little talk about the harms of marijuana as it’s advertised as a “positive good” with little side effects, and this advertising can be especially harmful for children when they frequently encounter it in Hillsdale.
Morrisey said there is not a push within the City Council to legalize dispensaries and he intends to continue his opposition to the industry.
“Many Michigan highways are lined with billboards touting marijuana shops and the gambling industry. These businesses are effective ways of keeping people satiated, stupefied, and indebted,” Morissey said. “They serve those who wish to enrich and empower the state apparatus by making citizens apathetic, passive, and helpless — that is, turning citizens into subjects. So, I intend to continue to oppose these industries.”
“}]] Members of the Hillsdale City Council say they remain opposed to the opening of marijuana dispensaries. Read More
