As first reported in the Detroit Free Press, Michigan's recreational marijuana market will bring in $134.5 million in tax revenue annually, once the program is fully fleshed out.
But this estimation hinges on one big assumption: That Michigan voters will pass a ballot proposal on November 6th, to legalize marijuana for adult recreational use.
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The figures for state tax revenues include a 6 percent sales tax and a 10 percent excise tax, come from VS Strategies, a Colorado-based cannabis consulting firm hired by the Coalition to Regulate Marijuana Like Alcohol (RMLA), which is spearheading the campaign to legalize pot in Michigan.
"We're estimating $520 million in taxes from 2020-2024," Andrew Livingston, a policy analyst with VS Strategies told the Detroit Free Press.
"By 2023, Michigan will reach maturity with sales of just under $1.5 billion (for both medical and recreational marijuana)."
Livingston says the revenues from recreational use will grow from $53.7 million in the first year to $134 million by the time the market matures. When combined with medical marijuana sales, the tax revenues jump another $40 million.
VS Strategies' numbers are based on estimates of nearly 1 million Michiganders who have said that they've used marijuana in the past month and who could be expected to buy marijuana on a regular basis.
Another 3.5 million people in Michigan have said they have used marijuana in their lifetime. The total number of marijuana users includes 300,000 people who are registered as medical marijuana users, Livingston said.
Michigan's proposed rate is lower than other states in order to be more competitive and to attract more people to the state's budding marijuana market, RMLA Coalition spokesman Josh Hovey said.
Here are some other states as example:
California: Growers, unlike in Michigan, pay a tax of $9.25 per ounce for marijuana flower while consumers pay a 15 percent excise tax.
Colorado: A 15 percent excise tax paid by the grower and a 15-percent sales tax for consumers. Individual cities can also impose additional city taxes on the sale of marijuana.
Nevada: A 15 percent excise tax paid by the grower and a 10-percent sales tax paid by consumers.
Oregon: A 17 percent sales tax.
Washington: A 37 percent sales tax.
The first $20 million in tax revenues for each of the first two years would go to research into the effects of marijuana use on different health ailments, including PTSD in veterans.
Of the remainder:
Michiganders shouldn't just look at the tax revenues coming in from marijuana legalization, says Scott Greenlee, director of Healthy and Productive Michigan, a group opposing the ballot proposal.
"What impact would it have in Michigan with a $57-billion budget? It's just not that significant," Greenlee has said.
Josh Hovey says the Coalition and its initiative have never promised that the marijuana tax revenues would be a 'cure-all' for Michigan's budget woes.
Hovey continues to refute Greenlee by saying, "This will help fund the state's most important needs. And we'll be saving millions in wasted costs of continuing to enforce the prohibition of marijuana laws."
There are 31 states, including Michigan, and the District of Columbia where medical marijuana is legal. In nine of those states and the district, adult recreational use of weed is also legal.
In addition to Michigan and North Dakota, where voters will consider legalization questions in November, the New Jersey Legislature is expected to act on legalization this year and Missouri and Utah voters will decide on medical marijuana ballot questions.
