Oakland County municipalities seeing big economic benefits from marijuana sales – The Oakland Press

For some Oakland County communities, the economic windfall promised when recreational marijuana was legalized statewide is coming true. State data shows that some are seeing big returns and officials say the investments are paying off.

Take Hazel Park. Ed Klobucher, the city manager, said marijuana payments received from the state for its eight licensed recreational retailers have helped bolster the city’s $3.5 million pension system, which jumped by over $1 million in just the past year.

The city receives these payments every year from the Michigan Department of Treasury as a portion of state sales taxes. The dollars are put into the general fund and designated for pension contributions, which are constitutionally-protected payments made to city retirees that must be made every month .

“Our city’s pension system is significantly underfunded, but we’ve never missed a payment,” he said. “We know that the pension system has a shortfall every year. We had to find some revenue sources to help the city cope with that adjustment in costs. These marijuana revenues are helping us meet those obligations.”

Each month, the city pays out $300,000 in pension payments, says Klobucher, from its $17-$18 million general fund budget.

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Over the past two years, over $50 million has been distributed to over 50 counties and dozens of municipalities across the state. Payments are based on the number of state-licensed recreational retailers located within its jurisdiction.

The dollars are pulled from the Marijuana Regulation Fund as part of the Michigan Regulation and Taxation of Marijuana Act, which was approved by voters in 2018 to legalize recreational marijuana.

This past March, the Michigan Department of Treasury announced that more than $42.2 million would be distributed among 163 municipalities and counties, including 62 cities, 15 villages, and 53 counties. On average, each county and municipality received around $260,000 in marijuana payments.

For the 2021 fiscal year, this means that each eligible municipality and county received more than $56,400 for each licensed cannabis retail store and microbusiness located within its jurisdiction.

According to David Harns, spokesperson for the state Cannabis Regulatory Agency (CRA), there are no restrictions in how communities can spend these marijuana payments. There are also no requirements for the locals to report any spending to the state.

Statewide, sales tax revenue was collected from 374 cannabis retail licensees during the 2021 fiscal year. Some of these municipalities host more than one licensed retail store and microbusiness. In fiscal year 2020, revenue was collected from 178 cannabis retailers.

For the 2021 fiscal year, more than $111 million was collected from the 10% adult-use marijuana excise tax. In total, there was $172 million available for distribution from the fund. For the 2020 fiscal year, more than $31 million was collected from the 10% adult-use marijuana excise tax. In total, there was $45.7 million available for distribution from the fund.

State law outlines how much is distributed from the Marihuana Regulation Fund.

Aside from the more than $42.2 million in disbursements to municipalities and counties, $49.3 million was sent to the School Aid Fund for K-12 education and another $49.3 million to the Michigan Transportation Fund.


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