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Local governments get a cut of marijuana tax revenue, but what are they spending it on?

House to vote on historic bill Friday that would decriminalize marijuana
Posted at 4:06 PM, May 14, 2021
and last updated 2021-05-14 18:18:54-04

GRAND RAPIDS, Mich. — Next March, Grand Rapids will be included for the first time in the state’s distribution of marijuana tax revenue.

This month, the state divvied up $10 million between 38 cities, 38 counties, 21 townships and seven villages that participate in medical and recreational sales, each one of them receiving $28,000 per store in their municipality.

Grand Rapids wasn’t included in that since the city’s first recreational sales didn’t come until after the start of fiscal year 2021. But when the next round is divided up next March, Grand Rapids will receive roughly $330,000.

But for their peak in 2024-2025, Grand Rapids City Planning Director Kristin Turkelson says the city could be pulling in over half a million dollars a year in tax revenue.

“We do expect that that will level off shortly thereafter because we, as a city, have made a decision that there’s only going to be so much land that would be eligible for an adult-use retailer,” she said.

Grand Rapids currently has ten licensed marijuana facilities operating within city limits.

In the past few months, sales of recreational marijuana have doubled sales of medical marijuana, legal in Michigan for far longer.

Part of the taxable revenue the state collects from marijuana sales will also go to the State Departments of Education and Transportation and medical research of the effects of cannabis.

Barton Morris, attorney and founder of the Cannabis Legal Group based in Michigan, wonders if all the money is going where it needs to be.

“In the past 50 years African Americans have been 3.3 times more likely to be prosecuted and arrested and convicted of marijuana-related offenses, and now, of course, all of those offenses are no longer criminal offenses,” he said.

While he’s happy tax revenue is going to schools, roads and research, the state’s bill legalizing recreational sales also includes direct language about social equity, but no specifics on expungement and clemency for felonies that are no longer crimes.

“They’re not doing so; they’re maybe doing some one-here-and-one-there,” he said. “Think about the people that were growing marijuana just a couple years ago, convicted of a felony for manufacturing marijuana, and now are having difficulty finding a job because of that. Those felonies need to be removed.”

Grand Rapids does have a social equity program, as well as a Good Neighbor Pledge for businesses, but Morris says many smaller municipalities haven’t focused as heavily on giving those historically affected by marijuana prosecution a way to get capital in the industry.

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