Michigan Municipal League: The Review Magazine Jan-Feb 2023 Edition

“ Last March, the state Treasury distributed $42.2 million in taxes from adult-use marihuana sales in 2021 to 62 cities, 15 villages, 33 townships, and 53 counties. Cities and villages received $16.5 million of that total. ”

industry could go bust. Colorado, which in 2014 became the first state to legalize recreational marihuana, is experiencing its first sustained downturn in sales and tax revenues. Dispensaries are closing, and sales and tax revenues have been falling in a market where supply is outstripping demand. California is struggling with a glut of illegal weed that is depressing prices of legal cannabis. That’s beginning to occur in Michigan, as well. The proliferation of unlicensed cannabis products has been cited as one reason for a 44 percent drop for the price of an ounce of marihuana between October 31, 2021 and the same date this year. One major marihuana retailer, Lume Cannabis Co., closed four of its 29 Michigan stores earlier this year. Dohoney, the Ann Arbor city administrator, said he’d like to see the state start forecasting marihuana sales and tax revenues to help municipalities with their budget planning. He said he thinks cannabis tax revenues in the city will continue to grow, but “we want to see actual proof of that” before the city bakes the assumption into it finances. Rick Haglund is a freelance writer. You may contact him at 248.761.4594 or haglund.rick@gmail.com.

Luna Pier’s city council recently voted to allow two marihuana retailers in the city following “a long and divisive process,” Mayor James Gardner said. The prospect of a new source of tax revenue “was an arguing point for people” favoring marihuana shops. “They thought it was a gold mine.” Gardner isn’t so sure but said marihuana taxes could help offset tax losses from the 2016 closure of Consumers Energy’s J.R. Whiting power plant in Luna Pier. The plant was 65 percent of the tiny city’s tax base. Gardner said the city, located on Lake Erie between Detroit and Toledo, wants to limit marihuana businesses so it doesn’t become known as a major stopping off point to just purchase marihuana. “We don’t want to be defined by marihuana facilities,” he said. “Lake Erie is our treasure, not marihuana.” And Gardner, recounting how the state cut revenue sharing in tough economic times, fears the state might someday short the city marihuana tax payments. “We’re gun shy,” he said. “I don’t trust the state.” There are also fears, based on what’s happening in some other states, that Michigan’s booming marihuana

THE COMMUNITY ADVANCEMENT FIRM

JANUARY / FEBRUARY 2023

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THE REVIEW

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