Michigan Officials Are Sending Nearly $100 Million In Marijuana Tax Money To Local Government And Tribes

Michigan officials have announced they are distributing nearly $100 million in marijuana tax revenue to over 300 local governments and tribes across the state thanks to the state’s adult-use legalization law.

The $94 million in tax dollars will support various local infrastructure, education and other programs and services in 313 municipalities, counties and tribal areas. That level of cannabis-derived funding is roughly equivalent to what the state allocated last year.

“A total of 114 cities, 39 villages, 81 townships, 75 counties, and four tribes will receive payments from the Marijuana Regulation Fund,” officials with the state Cannabis Regulatory Agency (CRA) said in a press release on Tuesday.

“For the State of Michigan’s 2025 fiscal year, this means each eligible municipality, county, and tribe will receive $54,017.10 for every licensed retail store and microbusiness located within its jurisdiction,” the agency said.

Under the state’s cannabis law, tax dollars from marijuana sales must go to cities and tribes with licensed retailers (15 percent), counties and tribes with retailers (15 percent), the School Aid Fund for K-12 eduction (35 percent) and the Michigan Transportation Fund for repairs and maintenance of roads and bridges (35 percent).

The announcement from state cannabis regulators comes amid a contentious battle over a take hike on wholesale marijuana products that was implemented last year and has since faced legal challenges from marijuana businesses in the state.

A Michigan court in January denied the state’s request to toss the lawsuit, which targets the 24 percent wholesale tax that’s been embraced by certain state Democratic senators and Gov. Gretchen Whitmer (D).

Recently filed legislation seeks to repeal the new tax.

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Michigan reached a marijuana sales milestone in 2024, with over $10 billion in adult-use cannabis products sold that year.

State officials said in late 2023 that tax revenue from legal marijuana grew by 49 percent compared to 2022, surpassing the amount of revenue made from alcohol sales. Marijuana sales incur a 10 percent excise tax—among the lowest rates in the nation—as well as a 6 percent state sales tax.

Meanwhile, Michigan legislators this session are looking into a proposal to create a statewide marijuana reference laboratory that would help standardize testing facilities to ensure quality control for cannabis products.

Photo courtesy of Chris Wallis // Side Pocket Images.