After Initial Struggles, Michigan Cannabis Market Is Making Great Strides

Michigan struggled for months to get its adult-use cannabis program up and running after voters passed Proposal 1 in 2018. Now that it’s operating and developing, the Mitten State is reaping the financial benefits as it continues to advance the industry.


Windfall for cities, schools, transportation

State officials on Friday announced the issuing of over $140 million in marijuana taxes to city governments, public schools and a municipal transportation fund. Of that tax money, which was collected in 2021, about $42.2 million will be distributed among 163 municipalities and counties. State officials said eligible municipalities and counties will receive north of $56,400 for each licensed cannabis retail store and microbusiness located within its jurisdiction.

“The Michigan Department of Treasury will distribute these dollars as soon as practical to eligible local governments,” State Treasurer Rachael Eubanks said. “This year’s payments will have a larger impact on their budgets.”

In addition to the $42.2 million in disbursements to city governments, $49.3 million will go to Michigan’s School Aid Fund for K-12 education and another $49.3 million will be deposited in a public transportation fund.

For the 2021 fiscal year, Michigan collected $111 million from a 10 percent excise tax levied on adult-use marijuana sales, according to the treasury department. A total of $172 million in marijuana taxes, which includes extra revenues from previous years, was available to be distributed.

RELATED: Despite Hurdles the Michigan Cannabis Market Is On Fire

Consumption lounge OK’d

Regulators on Friday also approved Michigan’s first cannabis consumption lounge in the small city of Hazel Park, a suburb of Detroit located just 10 miles north of the major metropolis.

The lounge, called Hot Box Social, has already hosted a number of cannabis educational workshops for people interested in working in the industry. With local approval to become a consumption lounge, Hot Box Social will begin opening for private events in the coming weeks and eventually expand to hosting the public by the summer. The 3,000-square-foot lounge with a 5,000-square-foot patio can fit about 200 people, according to a news release.

Nowfal Akash, spokesman for Hot Box’s parent company Trucenta, called the opportunity to open Michigan’s first cannabis lounge “an honor.”

“Our hope is that Hot Box Social will be used to bring a new experience for companies hosting brainstorming meetings, friends who are gathering for private parties, and one-of-a-kind fundraisers to raise money for nonprofit organizations,” Akash said.

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