Michigan local governments getting $87 million from marijuana sales

• $87 million in funds from recreational marijuana sales headed to county and municipal coffers
• Counties, cities and other municipalities eligible for the payments will receive just over $59,000 per licensed marijuana business 
• Five cities — Detroit, Ann Arbor, Grand Rapids, Lansing and Kalamazoo — getting more than $1 million

Michigan municipalities with recreational marijuana businesses are getting more than $87 million in payouts this week from taxes on marijuana purchases as sales continue to grow. 

According to the Michigan Department of Treasury, 71 counties and 198 cities, townships and villages will receive just over $59,000 per licensed marijuana business within their borders, and can spend the funds as they see fit. 

The industry has proven a boon for many local government budgets: For Monroe Charter Township, which borders Ohio, the $945,000 cut from recreational marijuana sales taxes makes up a third of the overall budget.

Marijuana money has already helped improve the township’s parks, fix the roads, pay for another sheriff’s deputy and more, Alan Barron, the township supervisor, told Bridge Michigan. Additional funds this year will likely go toward other projects that otherwise would have been put off, including needed updates to government buildings.

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Barron recognizes that a stigma against recreational marijuana remains, even among members of his own community — which is why township officials have largely focused the funds on projects people can experience for themselves. 

“The thing we wanted to do is to let people see it … the good things we're doing with the roads and things with no additional taxes,” he said. “We try to get the good out there.” 

Michigan’s recreational marijuana industry has hit record sales numbers in recent years, and revenue has continued to grow. The state collected more than $290.3 million in the 2023 fiscal year, according to the Department of Treasury.

The tax revenue from recreational marijuana sales is split between schools, roads and local governments. This year, $101.6 million was sent to the School Aid Fund for K-12 education, and another $101.6 million was deposited into the Michigan Transportation Fund. 

Very important benefit’

In addition to bonuses for roads and schools, the funding for local governments that have bought into the marijuana industry is “a very important benefit of the legal cannabis industry in Michigan,” Cannabis Regulatory Agency Executive Director Brian Hanna said in a statement. 

"The CRA is committed to doing our part in supporting our licensees so that they can continue to grow the local economy throughout the state with good-paying jobs and increased revenues for local government budgets.”

The city of Detroit, which began allowing recreational marijuana sales in early 2023 and has 33 dispensaries, stands to gain nearly $2 million from the state payments. Other cities getting more than $1 million include Ann Arbor, Lansing, Grand Rapids and Kalamazoo. 

Under the state’s recreational marijuana program, municipalities must opt into allowing recreational marijuana sales. Many choose not to — in 2023, voters in Rochester, Birmingham, Grosse Pointe Park and Keego Harbor all voted against efforts to allow marijuana retailers to operate in the communities.

But others, including college towns, big cities, southern border communities and small towns in the Western Upper Peninsula, embraced or eventually came around to the idea. The state of Ohio also approved recreational marijuana use, although sales haven’t yet begun.

Barron, the Monroe Township supervisor, said he continues to be surprised at how lucrative the industry has been. He said he’s not complaining — properties are occupied, dispensaries “still seem to be packed all the time,” and other businesses are benefiting. 

“There's only one Taco Bell, and they can't keep up,” he said.