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This article was reprinted with permission from Crain’s Detroit Business.
The city of Detroit, a relatively new entrant into the regulated adult-use recreational market, is set to receive more than $3.14 million in shared marijuana tax revenue from the state treasury.
Detroit, which began recreational marijuana sales in 2023, more than three years after Ann Arbor and other cities opened stores, is one of 302 Michigan municipalities and four tribes to share $99.5 million in tax revenue generated from the legal market sales of marijuana last year.
The funds, being distributed in the coming days, stem from the 10% excise tax from adult-use recreational marijuana sales, which totaled $3.29 billion in 2024. Under state law, counties split 30% of the tax revenue collected from the excise tax on recreational marijuana sales with cities, townships and villages. The money is distributed based on the number of marijuana businesses in their borders. The amount of product sold from each license holder is not considered when distributing that tax revenue; it’s purely based on the number of license holders in each community.
Marijuana has become a major source of revenue for the state and its municipalities and one of the largest “sin tax” generators in the state.
The 108 cities, 36 villages, 80 townships, 74 counties and four tribes that allow cannabis sales will receive $58,200 for every retail store and microbusiness in their communities.
The state collected more than $331 million in excise taxes from cannabis last year. The state’s School Aid fund and the Michigan Transportation Fund will each receive $116 million as part of the tax revenue sharing.
The communities with the highest share of the revenue are:
Detroit – $3,144,347.64
Ann Arbor – $1,513,945.16
Grand Rapids – $1,455,716.50
Lansing – $1,397,487.84
Kalamazoo – 1,106,344.54
Monroe Township – $1,048,115.88
The importance of the tax revenue varies greatly between communities. For Monroe Township, the marijuana tax revenue allocation represents nearly 20% of its $5.8 million budget, compared to just 0.12% of Detroit’s overall $2.7 billion budget.
Monroe Township has many cannabis businesses that cater to cross-border sales to Ohioans. Ohio legalized recreational cannabis late last year, but so far prices in the state to the south are much higher and retail locations much more sparse.
A change in state law last year now requires distribution of the tax to four federally recognized tribes in the state as well, who will receive $931,000 in tax revenue.
The counties with the highest share of the tax allocation are:
Wayne County – $5,007,664.76
Oakland County – $2,911,433.00
Washtenaw County – $2,620,289.70
Kent County – $2,270,917.74
Genesee County – $1,921,545.78
Kalamazoo County – $1,921,545.78
“Municipalities, counties, and tribes certainly benefit from their local cannabis businesses in many ways, including good-paying jobs, community involvement, and increased revenues for important priorities in their budget,” said Cannabis Regulatory Agency (CRA) Executive Director Brian Hanna. “This portion of the excise tax revenue makes a direct impact in the communities where our licensees work and live.”
“}]] [[{“value”:”While Detroit will receive the largest share, Monroe Township will receive enough to cover roughly 20% of its annual budget.
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