Michigan is set to distribute nearly $100 million in marijuana tax revenue to more than 300 cities and tribal governments, a windfall stemming from the state’s booming cannabis market. The funds, part of an overall $331 million tax distribution, are earmarked for infrastructure, education, and other community programs.
Local Governments See Major Cannabis Revenue Boost
For many cities and tribes, the influx of cannabis dollars provides a much-needed financial cushion. State Treasurer Rachael Eubanks confirmed that funds will start reaching local governments this week, allowing them to allocate the money as they see fit.
“The dollars received from adult-use marijuana taxes and fees go toward schools, roads, and back into Michigan’s neighborhoods,” Eubanks said in a statement Friday. “Local entities and tribes can spend these dollars however they deem fit for their needs.”
This year marks a milestone in Michigan’s cannabis policy—tribal governments will receive a portion of these funds for the first time. A total of $931,000 is set aside for four tribal governments, following an amendment to the state’s cannabis law.
Where Is the Money Going?
In addition to the nearly $100 million going to localities, the state has allocated:
- $116 million to the School Aid Fund for K-12 education.
- $116 million to the Michigan Transportation Fund to support road maintenance and infrastructure.
This allocation model aligns with Michigan’s adult-use marijuana law, which mandates that cannabis tax revenue be distributed across local governments, education, and transportation.
Record-Breaking Cannabis Sales Fuel the Payouts
Michigan’s marijuana market has been on fire. In 2024 alone, the state saw over $10 billion in adult-use cannabis sales, breaking multiple records despite fluctuating prices.
Some key milestones:
- March sales nearly hit $289 million, setting a new monthly high.
- August topped that with $295 million in legal cannabis sales.
With cannabis sales consistently growing, the tax revenue generated continues to surpass previous years. In 2023, Michigan’s marijuana tax revenue grew by 49% compared to 2022, even outpacing revenue from alcohol sales.
Local Communities Reap the Benefits
Brian Hanna, Executive Director of Michigan’s Cannabis Regulatory Agency (CRA), emphasized the direct impact of cannabis revenue on local communities.
“Municipalities, counties, and tribes certainly benefit from their local cannabis businesses in many ways, including good-paying jobs, community involvement, and increased revenues for important priorities in their budget,” Hanna said.
The rising tax disbursements reflect just how significant cannabis has become for Michigan’s economy. Consider the year-over-year growth:
| Year | Total Cannabis Tax Revenue Distributed |
|---|---|
| 2022 | $150 million |
| 2023 | Over $290 million |
| 2024 | $331 million (new record) |
Each year, more municipalities receive a share of the revenue, strengthening local economies and public services.
Expanding Equity and Legal Protections
Michigan’s marijuana policies continue to evolve. In October 2023, the state removed pre-employment marijuana testing for most government jobs. This change also allowed previously penalized employees to have their records cleared.
Around the same time, Governor Gretchen Whitmer signed legislation allowing state-licensed cannabis businesses to trade directly with tribal cannabis entities—a move that further integrates tribal businesses into Michigan’s legal cannabis market.
Meanwhile, Michigan’s Cannabis Regulatory Agency has launched a $1 million social equity grant program, aimed at supporting marijuana businesses with education, operational needs, and community reinvestment.
Push for Federal Cannabis Banking Reform
Despite the industry’s growth, cannabis businesses in Michigan still face a major challenge: banking. Since marijuana remains illegal at the federal level, businesses rely heavily on cash transactions, making them prime targets for theft.
The Michigan Chamber of Commerce has urged federal lawmakers to pass cannabis banking reforms, arguing that doing so would reduce security risks and lower fraud incidents for licensed dispensaries. A wave of break-ins at cannabis retailers in early 2024 has heightened calls for change.
