According to a recent report by the nonpartisan House Fiscal Agency, the sales of legal marijuana in Michigan generated $266.2 million in tax revenue for the government in the most recently completed fiscal year. This is more revenue than the state earned from beer, wine and alcohol combined.
The tax collected on adult-use marijuana sales was up by 49.1 per cent in fiscal year 2022-2023 which ended in October compared to the $178.6 millions collected in the previous year. This amounted an additional $87.6 millions in state revenue from cannabis sales when compared with the previous 12 months.
Cannabis revenue grew faster than any other major tax revenue itemized in a report by the House Fiscal Agency published last week.
The $266,2 million is due to the 10 percent excise tax on adult-use marijuana. The state also charges a standard 6 percent tax on products, which amounts to another $159.7 millions in revenue.
The annual report shows that the marijuana excise tax was responsible for nearly 8 percent of the total revenue. The share of revenue is about 1.3 per cent when sales tax is included.
Last fiscal year, the marijuana excise taxes generated more revenue for the state than alcohol taxes. These taxes contributed approximately $192.6 millions total — $46.6 million in beer and wine, and $146 in liquor. This is a change from fiscal 2021-22 when alcohol taxes combined brought in about $12.9 million in additional revenue.
In contrast, the marijuana tax revenue in Michigan was less than half the $722.2 millions Michigan earned from tobacco taxes during the last fiscal year.
The marijuana excise taxes generated $52.4 million of tax revenue in October 2023, more than any other source, including sales and use tax, income tax, insurance tax, and tobacco tax.
Michigan voters approved the legalization of adult-use marijuana in 2018. Sales will begin next year.
In the last few months, the state has broken sales records while the cost of marijuana remains at record lows. The price of an adult-use ounce of cannabis is now hovering around $98, a mere few months ago. By comparison, in December 2021 the price of an ounce would have been about $180.
Michigan Gov. Gretchen Whitmer, a Democrat, signed two bills into law that would allow state-licensed cannabis businesses to trade with tribal cannabis entities. Both bills took immediate effect.
According to an analysis by House staff, the bills were designed to maintain a level playing ground by requiring that tribal businesses pay the same rate of tax as other businesses.
Michigan is among the states that has seen cannabis taxes generate more revenue than alcohol taxes.
In Illinois, for instance, the legal cannabis industry brought in $451,9 million — approximately $135,6 million more than alcohol.
Colorado generated more revenue from marijuana last year than from alcohol or cigarettes — and nearly as much alcohol and tobacco combined.
Similar milestones were also reached in Arizona, and Washington State.
In Michigan, where cannabis is legal, a change approved by the state Civil Service Commission in July took effect last week , ending pre-employment marijuana tests for most government workers . This change also allows those who have already been penalized for positive THC test to get the sanction rescinded retroactively.
The bill that was recently introduced to the legislature will legalize the use of psychedelic plants, fungi and mushrooms as long as the activities such cultivating and distribution are not done for money or any other valuable consideration.
Michigan legislators called for the U.S. Congress to invest in research and development of “non-technology treatments”–including psychoedelics –to help treat psychological trauma resulting from military service.
Top Federal Health Official Promotes Science-Based Drug Scheduling Procedure Amid Marijuana Reviews
The article Michigan Marijuana tax revenue grew by 49% over the past year, surpassing alcohol earnings first appeared on Marijuana Moment.
