[dropcap class=”kp-dropcap”]I[/dropcap]n the first two months of recreational cannabis sales, Michigan has totaled nearly $18 million in sales. Michigan imposes a 10 percent excise tax on recreational cannabis and a six percent excise tax, equating to nearly $3 million in tax revenue generated in the first two months.
A new study has revealed prices for legal cannabis in Michigan were among the highest in the country in 2019. Dispensaries in Michigan paid $2,917 for a pound of flower in 2019 compared to the average of $1,304 spent in the ten other states studied. The high price can be attributed to the high demand for cannabis products.
“The demand has been huge; we have lines daily,” said Tarek Jawad, owner of Herbology Cannabis Co. “Supply is still slim, but I am still very, very well stocked.”
For comparison, Illinois legalized recreational cannabis sales began on January 1 and the state generated nearly $40 million in sales during its first month of sales. In Illinois, all 41 licensed medical cannabis dispensaries were allowed to begin selling recreational cannabis immediately. In Michigan, where the total number of licensed dispensaries reached 43 as of February 4, only a handful of stores were allowed to open over the first few weeks of sales. On the first day of sales, only three licensed dispensaries were open.
Michigan’s law requires the first $20 million collected in excise tax over the first two years will go toward medical research involving cannabis. The remaining tax revenue is broken down to: 15 percent to cities that allow recreational cannabis businesses and 15 percent to counties, proportional to the total number of businesses and retailers. The remaining 70 percent will be split between the School Aid Fund for K-12 education and the Michigan Transportation Fund for road and bridge repairs. State budget officials have projected the recreational market to bring in $1.5 billion per year once the market reaches full maturity.