MARQUETTE, Mich. (WZMQ) – Cannabis sales in the state of Michigan in just six months of this fiscal year have already reached over 1.2 billion dollars. Having been legal for recreational use since 2018, the industry has already grown exponentially. State Attorney Douglas Mains commented that there are now a handful of banks treating Michigan dispensaries like any other business.
“Everyone of our clients that are involved with the cannabis industry has a banking relationship with some financial institution, to a large extent kind of treated like any other cash-based business that’s out there,” said Michigan State Attorney Douglas Mains.
Although business is booming, the internal revenue code forbids any businesses associated with a Schedule I or II substance from deducting ordinary business expenses from its gross income. Cannabis is sold for recreational adult use and serviced medically and as a result, the money that comes into municipalities such as Marquette is split in two areas.
“Under both medical and adult use they can charge kind of local license application fees or annual renewal fees which I think by state law the maximum they can do is about 5,000 per application,” continued Mains. On the flip side, there is a 6% tax on adult-use sales that can head straight into the general fund of the municipality.
“You have a pot of money that’s divided however many licenses are in the state and then your allocation is based on the number of dispensaries you have,” said Marquette Assistant City Manager Sean Hobbins. Many cities opted to put a cap on the number of licenses, but Marquette did not. The 2022 dispensary taxes reached around $50,000 per license, putting Marquette’s Cannabis tax revenue at around $200,000.
“It’s just another revenue source for the city it goes to cover our general operation so it’s absorbed into our general fund. it’s not necessarily earmarked for anything special it’s just revenue from the city like any other tax dollars,” continued Hobbins.
Attorney Mains said this is only the beginning of the legislation fronts within the cannabis industry.
