Detroit Passes Adult-Use Cannabis Industry Ban

Detroit has joined the 79% of Michigan municipalities to opt-out of the adult-use cannabis industry, in return forfeiting their share of the state’s 10% excise tax imposed on adult-use sales.

Full story after the jump.

Detroit, Michigan has banned recreational cannabis operations, joining 79 percent of the state’s municipalities in barring adult-use dispensaries and cultivation within their city limits, the Detroit Metro Times reports. Cities and towns that don’t permit recreational sales will not get a share of the 10 percent excise tax imposed on recreational cannabis sales.

The City Council passed the ban five days after the state began pre-qualifying current operators for recreational sales. The Detroit action is expected to be temporary until at least January 31 as local lawmakers hope to create new city-specific regulations for the industry.

In the first full fiscal year, Michigan cannabis sales are expected to generate $180.5 million in taxes, according to the Michigan Senate Fiscal Agency figures outlined in the report. By 2022-2023, that is expected to reach $287.9 million. The tax revenues derived from cannabis will be used for schools and roads, and be split among the municipalities that opt-in.

Current medical cannabis businesses who are pre-qualified are allowed to transfer up to 50 percent of their product for recreational sales, according to a bulletin sent to operators summarized by the Detroit News.

Marijuana Regulatory Agency spokesman David Harns said the allowance “will keep production and sales on the medical side moving as well.”

Adult-use sales are expected to roll out January 1, albeit on a limited basis.

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