Recreational marijuana: How Michigan's potential legalization compares to other states

Voters to decide Nov. 6 whether to legalize recreational marijuana statewide

(David McNew/Getty Images)

DETROIT – In 2008, Michigan voters approved Proposal 1, which legalized the medical use of marijuana in the state. Now, 10 years on, Michigan voters will decide whether to go a step further by legalizing the recreational use of marijuana statewide. So how does Michigan’s proposal compare to states that have already legalized recreational marijuana?

The basics

The proposal that will appear on the Nov. 6 ballot is titled Michigan Marijuana Legalization Initiative (MMLI), and it would allow persons 21 years of age or older to possess and use marijuana as long as they’re not in public or driving under the influence. Should MMLI pass, individuals would be allowed to carry up to 2.5 ounces of marijuana on their person and possess up to 10 ounces at home. They would additionally be allowed to grow up to 12 marijuana plants at their residence.

However, municipalities would be able to limit or ban marijuana businesses within their boundaries. MMLI would also impose a retailer-paid excise sales tax of 10% on marijuana sales in addition to the state’s standard sales tax of 6% paid by the consumer.


The 10% excise tax rate would essentially make Michigan the state with the lowest overall tax rate on recreational marijuana in the nation. Colorado imposes a 15% excise tax and 15% sales tax on recreational marijuana sales. Oregon has a 17% sales tax with up to 3% in local taxes. Washington maintains a hefty sales tax of 37% on recreational sales. California, Nevada, Alaska, Massachusetts and Maine also have higher overall taxes on the product than Michigan would if voters approve MMLI.

Opponents of the ballot initiative have actually seized upon its relatively low tax as an argument for their side. “Michigan would become the marijuana capital of America if this passes,” said Scott Greenlee, president of anti-legalization group Healthy and Productive Michigan. “The 10 percent tax rate is the lowest of any state that has recreational marijuana, and yet people would be able to have more of it on them and in their homes than anywhere in America.”

Revenue allocation

The idea behind MMLI’s restrained excise tax is to encourage consumers to shop in the legal marketplace rather than the illegal one, while still raising the hundreds of millions of dollars necessary to provide significant funding for the following:

  • Administrative costs in Michigan’s Department of Licensing and Regulatory Affairs
  • $20 million annually (for at least two years or until 2022) to research the use of marijuana in treating U.S. military veterans and preventing veteran suicide

All remaining revenue would be divided as such:

  • 15% to cities in proportion to the number of marijuana retail stores or micro-businesses within the city
  • 15% to counties in proportion to the number of marijuana retail stores or micro-businesses within the county
  • 35% to the school aid fund for K-12 education 
  • 35% to the Michigan transportation fund for the repair and maintenance of roads and bridges

Even some proponents of MMLI admit, however, a 10% excise tax won’t be sustainable in the long-run as supply catches up with demand and prices drop. Matthew Abel, a senior partner at Cannabis Counsel (a marijuana law firm in Detroit) and the executive director of the Michigan chapter of the National Organization for the Reform of Marijuana Laws, explained that the state legislature will have to take action in the future if it wants to sustain recreational marijuana revenue.

In Colorado, higher taxes on recreational marijuana enable the first $40 million to go to education and infrastructure projects in the state. Local governments that have approved marijuana businesses also get a share of the revenue, as they would in Michigan. The rest enters a Marijuana Tax Cash Fund that is used for a variety of aims.

Timing and more

Should Michigan voters approve the recreational marijuana ballot initiative on Nov. 6, the state’s Department of Licensing and Regulatory Affairs would not begin accepting business applications until December 2019. For 24 months after that, the department can only accept applications from Michigan residents who already have a license to operate a medical marijuana facility.

The slow timeframe bears a resemblance to Colorado’s recreational marijuana rollout. Voters there legalized the substance in 2012, but the first businesses didn’t open until January 2014. Also like Colorado, Michigan’s recreational marijuana proposal does not prohibit employers from drug testing their employees and making disciplinary decisions based on such tests.

A recent poll suggests Michigan’s vote on MMLI is likely to be close, but the broader national trend feels like a tipping point has been reached on marijuana legalization. Thirty states have legalized it in one form or another, recreational use is now legal along the entire West Coast and a number of Democratic senators are gearing up to propose legislation to decriminalize and regulate marijuana at the federal level.

You can find the full text of the Michigan Marijuana Legalization Initiative here.


Be Heard. Go Vote!

A reminder to “Be Heard – and Go Vote!” this election season. The Aug. 7 primary election is your first chance to weigh in on big races for governor, U.S. Congress and the State Legislature. Unfortunately, last time around turnout was less than half of the voting public in southeast Michigan. We all have political opinions. Don’t just share them on social media. Share them in the voting booth.