As Michigan Awaits Millions in Marijuana Tax Revenue, Massachusetts Still Waits
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Will Michigan voters have green on their minds next week at the polls? Marijuana supporters are hopeful, as they anticipate impressive tax revenue -- as high as $520 million over the next five years -- for the state if voters approve recreational marijuana sales.
In Massachusetts, state officials also have money on their mind -- the millions the state is losing each month by delaying the start of adult-use marijuana sales, two years after voters approved it.
It's a tale of two different states with two different priorities -- but both aiming for the same goal.
In Michigan, voters will consider Proposal 1 on the November ballot. If passed, it will legalize recreational marijuana sales statewide.
This could be a boon for the state's economy. The Coalition to Regulate Marijuana Like Alcohol, one of the groups backing the legalization effort, recently projected that legalization of adult-use marijuana will bring in $134 million in state taxes in 2023 alone.
In total, they estimate marijuana taxes would reach $520 million in the first five years after sales begin. The taxes would come from a 10 percent excise tax on marijuana, according to Ballotpedia.
There's been precedent for these kind of numbers. Other states have seen an enormous influx of cash from marijuana. Washington, which has about two million less people than Michigan, collected about $319 million in marijuana taxes and license fees in 2017, according to the state treasurer’s office. But the excise tax is much higher at 37 percent.
Colorado, which also is smaller than Michigan in population, collected about $247 million in marijuana taxes and fees in 2017, the state’s Department of Revenue reported. Colorado has a 15 percent marijuana excise tax and a 10 percent tax on marijuana sales, reported Ballotpedia.
According to the ballot proposal, tax revenue in Michigan would be sent to local governments. The money would pay for local government operations, improvements to schools, and road and bridge repair and maintenance.
Meanwhile, in Massachusetts, leaders have grown concerned about not raking in the marijuana tax money they had counted on for the current fiscal tax year.
That’s because Massachusetts, which approved legal recreational marijuana in November 2016, still has not launched its program. State officials now believe they are weeks away from the first dispensary being allowed to sell to the public.
Massachusetts has been unusually slow to act. In comparison, Nevada had its program launched by July 2017 and California by January 2018. Voters in both of those states also approved adult-use sales in November 2016.
What’s the holdup? There have been many, but the latest roadblock has been a slow licensing process for marijuana testing facilities.
Sales were expected to start last July. Proponents of the measure said the state is losing about $176,000 a day since then. That’s an issue as state officials had hoped marijuana taxes would help to balance the state budget in 2019.
Now they're hoping to finally bring the earnings just like their beloved Red Sox.