Recreational Marihuana Legalization in Michigan

Recreational Marihuana

Legalization in Michigan

November 12, 2015



Michigan Would be 5th State to

Authorize Recreational Marihuana

2

Market Landscape

Market Size

Colorado

Market Structure

Est. 121 metric tons (21 and

older resident)

Population: 5.4 million

Vertically integrated ¨C

cultivation, processing and

manufacturing, and retail are

common enterprise

Medical Marihuana

Regulated

Home Grow

Allowed (transfer up to one

ounce to a person 21 older)

Misc.

3

Washington

Est. 175 metric tons (all

ages)

Population: 7 million

Three tier ¨C producer,

processor, and retailer

Prohibition against

producer/processor also

being a retailer

Unregulated until July 2015

Dispensaries being phased

out ¨C retail stores to replace

Prohibited

Michigan (MI Legalize)

???

Population: 10 million

Two tier ¨C product

manufacturer and retailer

No prohibition against same

person holding both licenses

Largely unregulated at state

level

Allowed (transfer 2.5 ounces

or less to consumer)

New hemp industry

regulated by Dept. of

Agriculture and Rural Dev.

Regulatory System

Colorado

Washington

Regulatory Level

State ¨C top down

Department of Revenue

State ¨C top down

Liquor and Cannabis Board

Local Zoning

Ordinance

Licensees and

Limits

Yes

Yes

Required - Producer/

Processor/Retailer/Testing

No limit on number

Uniform based on

establishment type and size

Required - Cultivation/

Manufacturing/Store/Testing

No limit on number

Uniform based on

establishment type and size

Inventory Tracking

(seed to sale)

Testing

Mandatory

Mandatory

Mandatory ¨C third party

Mandatory ¨C third party

Labeling

Mandatory

Mandatory

Fees

4

Michigan (MI Legalize)

Local governments

Dept. of Treasury responsible

for tax collection

Yes

Required - ¡°marihuana

establishment¡±

No limit on number

Unknown, likely non-uniform

(not to exceed $5,000 per

establishment)

Not Mandatory

Not mandatory (implied for

edibles)

Mandatory

Can Marihuana Solve the State¡¯s Fiscal Problems?

5

Colorado

Washington

Michigan (MI Legalize)

Taxes

15% (wholesale rate)

10% (retail sales)

State sales tax

Local sales tax if applicable

37% retail sales

State sales tax

Local sales tax if applicable

10% retail sales

State sales tax

Local taxes prohibited by

state constitution

Medical Marihuana

Exempt

State Tax Revenue

Yes ¨C but pays sales tax

Yes

Revenue Disposition

State (enforcement)

Local governments

School construction

No ¨C but exempt from

sales tax

FY2015 ~ $70M

FY2019 ~ $369

General Fund

Local governments

FY2015 ~ $88M

???

Transportation (40%)

Schools (40%)

Local governments (20%)

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