Michigan Marijuana Licensing >
Legalized sales of recreational marijuana began in December 2019 with some licensed retailers. Reports by the Marijuana Regulatory Agency revealed that in the first month of sales, Michigan made about $7 million as revenue from cannabis. Also, from January to March 2020, the sales figures rose by at least 40% each month.
In January and February 2021, the total monthly sales for marijuana totaled about $67 million each. In March 2021, the total demand for marijuana increased by 44%, with sales amounting to $97.6 million. The increased demand was attributed to more dispensaries starting operations in the state of Michigan. This further led to a rise in the conversion of customers from illegal dealers to the legal market. On 20th April 2021, the Michigan marijuana market recorded $10.1 million single-day sales. A study conducted by Michigan State University in 2020 forecasts that total marijuana demand will eventually surpass $3 billion yearly.
The Michigan Regulation and Taxation of Marijuana Act (MRTMA) regulates the taxation of marijuana in Michigan. Per this Act, marijuana sale is subject to a cannabis excise tax of 10% of the sales price and a 6% sales tax.
The MRTMA requires the Michigan Department of Licensing and Regulatory Affairs (LARA) to execute various actions such as the formulation of more rules before issuing licenses to marijuana and retailers.
A licensed microbusiness or marijuana retailer may sell marijuana to adults for a price that includes the 10% excise tax. The Instructions for Form 5676 explain how to determine the monetary equivalent of the excise tax, especially if the amount of tax was included as part of the business' gross marijuana sales for the fiscal year.
Upon receiving marijuana tax, the Michigan Department of Treasury deposits the money into the Marijuana Regulatory Fund. According to the provisions of the MRTMA, the money in the marijuana regulatory fund shall first be expended on the administration, implementation, and enforcement of the Act until 2022, or for at least two years. The aim is to provide $20 million annually to support clinical trials researching the effectiveness of marijuana in treating various illnesses. After appropriation, the balance must be distributed as follows:
The Michigan Department of Treasury is responsible for administering marijuana taxes in the state of Michigan. The treasury advises the governor on revenue and related tax policies, safeguards the state's credit, collects and manages state taxes. The department is also responsible for collecting, distributing, and investing the state's revenue.
Licensed marijuana businesses in Michigan must file their taxes with the Michigan Treasury Online (MTO). Using the MTO, taxpayers can pay, file, and manage their tax accounts online, anywhere, and anytime. Persons engaged in marijuana businesses in Michigan can contact the Department of Treasury for tax-related inquiries. They can also do that in person by visiting the agency at:
Michigan Department of Treasury
430 W Allegan Street
Lansing, MI 48933
Phone: (517) 636-4486