GRAND RAPIDS, Mich. — West Michigan is getting ready to reap the first round harvest of legal marijuana tax returns.
Last week, Ryan Cummings broke down the big gains in Lowell. The state’s second-largest city, Grand Rapids is now pushing W-2’s, expecting millions in returns with regards to the state’s excise tax.
The first recreational retailer opened in October of last year, which is why city officials tell FOX 17 they are post-dating recreational cannabis tax returns until 2021.
“That $500,000 number is really based on the number of facilities we have an operation today,” said Grand Rapids Planning Director Kristen Turkleson. “There's no solid number we can provide for you because it's just such a complicated formula that the state law has set out.”
Turkleson's estimate is based on the eight pot shops currently licensed by the city. It could easily reach the million-dollar mark and beyond, given there are already nine more approved recreation pot shops approved and eight others in queue with the city.
Each recreational sale from a dispensary comes with a 10% excise tax: 15 percent goes to the county; another fifteen goes to municipalities and allotted by the city commission, 35 percent goes to the Michigan treasurer’s transportation fund, and the final 35 percent goes towards school aid to be used for K-12.
Note, there is no cap on the number of marijuana shops allowed within Grand Rapids city limits. Licensing is based on parcels of land available, as long as they’re not too close to schools, churches, or drug rehab facilities. Darel Ross, spokesperson for 3Fifteen, says recreational cannabis is booming. The fact that cannabis was deemed essential during the pandemic proves the industry’s durability.
“If you're asking about margins and profitability and so forth, the cannabis industry definitely has a unique set of circumstances, unique taxations, and so forth,” Ross said. “Remember, we're devoid of the write-offs that normal businesses get and so forth. But yeah, it's truly a great time. I liken it to be at the forefront of any new industry, right? So if you were at the forefront of the auto industry or manufacturing industry, and that's what we're seeing with the cannabis rollout."
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