Michigan Could Collect $130 Million in Recreational Cannabis Revenue

[dropcap class=”kp-dropcap”]A[/dropcap]n organization dedicated to legalizing cannabis in Michigan believes recreational cannabis could bring in hundreds of millions in tax revenue to the state.

The Coalition to Regulate Marijuana Like Alcohol is the committee supporting Proposal 1, a 2018 ballot initiative that would abolish cannabis prohibition, and instead regulate and tax the plant like alcohol. Alcohol regulation allows the sales during the week, but Sunday sales are with a special permit and sales on Christmas are not permitted.

The cannabis legislation would also set up a 10 percent excise tax on top of the six percent sales tax in the state.

For the research, the coalition tapped VS Strategies, a group with previous lobbying and ballot initiative success in Colorado and Nevada.  The group used state and census data and compared it to other states that have already legalized cannabis. VS Strategies assumed the first adult-use businesses would open in 2020, and in the first five years the excise tax would net $325 million while sales tax brought another $195 million. It also estimated income from cannabis sales doubling the first two years, creating a new market worth over $800 million dollars a year, adding jobs and economic growth.

“Roads, schools and local governments have been underfunded in Michigan for years. By voting yes on Proposal 1, Michigan will generate hundreds of millions in new revenue for these vital needs. In addition to generating new tax dollars, the state will also save millions of dollars each year by ending the failure of marijuana prohibition,” said the coalition in a statement.

The sales tax is estimated to be $130 million a year, lower than the coalition’s previous estimates. “We’ve never said this initiative is going to solve all of Michigan’s funding problems, we’re only going to direct the funding where we think it’s needed,” said Josh Hovey, spokesman for the Coalition to Regulate Marijuana Like Alcohol.