On November 6, 2018, Michiganders will again see marihuana on the ballot, as they decide whether or not to support Proposal One. The Proposal would legalize recreational marihuana usage throughout the State for persons who are 21 years of age or older. The law would allow
any person to possess up to 2.5 ounces of usable marihuana or its equivalent for use. Further, it would allow for the opening of recreational marihuana facilities licenses to produce, sell, process, test and transport recreational marihuana. Many of the current cannabis laws that are
on the books would be changed, turning what had previously been criminal misdemeanors into civil infractions, and it will be perfectly legal for retail sales of the drug to take place – provided the businesses are licensed. However, the regulatory structure will be strict, and the fears of
every gas station selling legal marihuana to school children are completely unfounded, and in fact, could not happen under the language of Proposal One.

Passing this law is believed to have various benefits for all citizens in Michigan, some of which are financial. There are rules in place that help make Proposal One much more than just a move to ‘legalize marijuana’. Instead, it could have a substantial positive fiscal impact.


Tax Revenue Distribution

A key part of this proposal is that marijuana retailers will pay an extra 10% tax on any products they sell the public. The tax they pay will then be distributed back into different areas of society. First, the money is earmarked to cover costs related to implementation, administration, and enforcement of Proposal One and MMFLA Facilities to ensure compliance with State statutes and regulations. Second, money would then be sent to subsidize medical research efforts and clinical drug trials to help discover and confirm links between marijuana and how it could help prevent veteran suicides and other medical conditions.

Finally, the remaining funds would then be distributed out back into opted-in municipalities where marijuana stores are located, along with a portion of the distributions going to the School Aid Fund and the Michigan Transportation Fund.

In essence, there are significant financial benefits for the State of Michigan if this Proposal One is passed. The Proposal would legalize recreational marijuana businesses, who were properly vetted and approved by a State Licensing process, meaning the retail business owners can help give back to the State through the special tax.


Reduction Of Felony Expenses

If recreational marijuana is made legal, then it would have other positive financial impacts on the State and local governments as well. Primarily, there would be a sizeable decrease in how much money is spent on the prosecution of felony and misdemeanor charges relating to marijuana sales and possession.

Research suggests that over $5,000 will be saved per prisoner per year (http://www.senate.michigan.gov/SFA/Publications/BallotProps/Proposal18-1.pdf). How? Under Proposal One, many current misdemeanor and felony charges will be downgraded to civil infractions. As a result, there will be fewer arrests, fewer occupants of city and county jails, as well as State Prisons. This reduces the strain on the police departments and saves money on unnecessary prosecutions at the local, county and State level. The cost savings from that would be substantial.


Stimulates The Economy

Naturally, with recreational marijuana being made legal, this opens up numerous new business opportunities for people in Michigan. If you obtain the right license, you can start your own marijuana business. This means more jobs for people in the State, which helps deal with unemployment and stimulates the economy. You have local businesses generating profits, and we know they pay taxes on those pofits, which get pumped back into the local and State economy. From a financial standpoint, these businesses are a win-win for municipalities and the State. Beyond just the taxes, there are also going to be application fees, renewal fees and yearly regulatory assessments from both the State and the City on these businesses, generating even more revenue.

The bottom line is that it may cost money to implement this new law, but some serious financial benefits come with it. The State as a whole will benefit from recreational marijuana being made legal, and lots of money can be saved.

If you’re looking into opening a marijuana business in Michigan, then you need to know the laws surrounding licensing, or the marihuana industry in general. Consequently, we can help with all of this by providing expert legal advice, both regarding Proposal One’s requirements, as well as that of the Michigan Medical Marihuana Act and the Michigan Medical Marihuana Facilities Licensing Act. If this interests you, please don’t hesitate to give us a call or get in touch via email.