LANSING – Advisory group recommends new taxes on marijuana sales to raise millions of dollars to help improve the diversity and success of disadvantaged groups in the industry.
Data collected by the Michigan Marijuana Regulatory Agency in December shows that only 3.8% of those involved in licensed marijuana recreational businesses in Michigan are black and only 1.5% are Hispanic or American, according to a report by the agency Latinos are.
The voter-approved Michigan Regulation and Taxation of Marijuana Act of 2018 directed the agency to create a plan to “allocate the participation of people from communities disproportionately affected by the prohibition and enforcement of marijuana to the marijuana industry promote and promote and positively influence these communities. ” . “
The agency’s Racial Equity Advisory Workgroup on Tuesday released its recommendations on improving access to capital for black and brown companies, as well as technical, educational and other forms of assistance. Implementing some recommendations would require legislative action.
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The agency “is committed to making Michigan the country’s model agency, including leadership on diversity, equity and inclusion in the marijuana industry,” the report said.
Recommendations include:
- Reintroduced a 3% excise tax on medical marijuana sales, which was lifted in 2016, and donated 30% of the proceeds to a social equity investment program. According to the report, imposing such a tax on medical marijuana sales of $ 319.3 million would have generated nearly $ 9.9 million in tax revenue in 2020, with approximately $ 3.3 million for investments were used in social equity. Another 25% of the proceeds would go to the host community, 30% to the host district, 5% to the sheriff, and 10% to the Michigan Marijuana Medical Research Fund. The legal sale of medical marijuana since 2008 is already subject to sales tax of 6%.
- Recreational marijuana, legal since 2018 and already subject to 6% sales tax and 10% excise tax, will introduce a new 1.5% tax on transactions between licensees such as sales between manufacturers and retailers. The report doesn’t say how much the new tax is likely to increase, but 20% of the proceeds would go to the Social Equity Investment Fund, 30% to the licensee’s host city, 20% to the host country, 20% to the school district and 10 % go to medical marijuana research. Eric Foster, chairman of one of the working group’s subcommittees, said Monday the tax could generate a total of $ 2-3 million a year, but cautioned that it was a rough estimate.
- Use the funds raised from the new taxes to provide loans or grants to social justice license applicants to assist with startup and / or operational costs, as well as employee training programs and technical support.
- Training and partnership programs “for those with social justice who lack the direct financial and professional experience to start a licensed business, but who meet a variety of important social and socio-economic criteria to qualify as a property candidate.” In one program, eligible employees would work for large corporations who are committed to supporting the capital and technical requirements that the employee needs to own a marijuana business.
- Integrating recreational marijuana with economic development agencies and land banks “to improve access to land use for social justice applicants and to facilitate the development of economic development programs in the development of social justice marijuana businesses”.
- Redistribute some funding currently being used for grants to counties for targeted grants “to increase black and brown-owned businesses’ presence in the cannabis space and to help brown and black businesses achieve long life” .
- A crowdfunding platform hosted on the agency’s website that serves as a link between local investors and local marijuana companies in economically disadvantaged communities. The platform, dubbed the Michigan Marijuana Market, “would ultimately increase the likelihood of success for locally owned businesses that are critical to the economic, social and political vitality of a community,” the report said.
- Requiring larger marijuana companies as a condition of license renewal to purchase a certain portion of their supplies and services from disadvantaged companies.
- Training courses for local authorities to learn about social equity programs and bilingual presentations to help social equity license applicants understand the steps involved in licensing and building a marijuana business.
- A new micro-business license. As with the existing microbusiness license, the cultivation, processing and sale of recreational marijuana would be permitted under a single license. However, the new license would allow 300 plants out of 150 and would allow the micro-enterprise to both source mature plants from licensed growers and use licensed processors. The changes would protect micro-businesses from crop failure, ensure continued supplies, expand the range of products for sale, and reduce capital requirements by making the purchase of processing equipment optional, the report said.
Members of the working group met with reporters on Monday to discuss their recommendations.
“This is a really, really progressive initiative,” said Barton Morris, attorney and chairman of one of the working group’s five subcommittees. “It will make Michigan a leader in our industry across the country.”
While the chairs of the working group’s subcommittees described their recommendations as innovative and an opportunity to build wealth and opportunities in color communities, they also said it was time to start the hard work of turning your ideas into reality.
This is just the beginning, said Tatiana Grant, chair of the subcommittee.
Andrew Brisbo, executive director of the Michigan Marijuana Regulatory Agency, said he would create a permanent working group on equity and diversity to implement the recommendations.
The working group, which has met monthly since last July, consisted of state lawmakers, representatives from communities with significant minorities, representatives from minority industry and broader corporate groups, lawyers experienced in racial differences and justice, and individuals with banking experience , Finance and real estate.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @ paulegan4. Read more about politics in Michigan and subscribe to our election newsletter.
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