Taxing Marijuana Could Be Michigan’s $63 Million Cash Cow


Guy Bentley


Taxing medical marijuana could generate tens of millions of dollars and sustain 10,000 jobs for the state of Michigan, according to an economic impact analysis.

Director of economics at Hillsdale College Dr. Gary Wolfram believes taxing marijuana could rake in between $44.3 and $63.3 million per year for the state.

“It will create a robust economy in the sense that it will make a safe place for people who currently have registration,” Wolfram told FOX 17. Wolfram based his estimates on proposed legislative reforms that would tax medical marijuana dispensaries at 3 percent and patients would pay a 6 percent sales tax.

Wolfram believes if two-thirds of Michigan’s medical marijuana patients buy their product from a dispensary the state will net $44.3 million per year.

If Michigan introduces a system that licenses medical marijuana growers, dispensaries, processors, and distributors and gained a 20 percent increase in registered patients, the tax take could soar to $63.5 million. Wolfram’s analysis was, in part, informed by data from Colorado’s system of legal medical marijuana prior to full legalization in 2012.

“It’s certainly a good number if you’re a state rep. trying to balance the budget right now dealing with Detroit Public Schools or Flint, whatever the latest problem is right now,” Wolfram said. “An extra $40 to $60 million would certainly be helpful.”

But Wolfram concedes increasing taxes could hit the number of medical marijuana patients who buy their cannabis from dispensaries. “There could be some drop-off, but given what we know about … how responsive demand is to price changes in the marijuana industry and other industries like it, it’s fairly inelastic.”

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