Medical marijuana shops would be taxed at 3 percent, and customer patients would also pay the state’s six-percent sales tax, under legislation which is in place to be voted on Wednesday in the Michigan House.
The proposed dispensary tax was decreased from 8 percent in a substitute bill adopted by the House on Tuesday, and the medical tax would be terminated if recreational cannabis use and taxable sales are later allowed in the state.
The three-bill package would create major alterations to the state’s medical marijuana program, approved by voters in 2008. Local governments could also put a cap on the number and type of facilities that can operate in their jurisdiction.
Advocates say the legislation will control the cultivation of the medical marijuana industry while ending legal uncertainty over marijuana shops and edibles, offering patients safe access to consistent products.
Medical marijuana supporters debated back and forth about the 8 percent tax rate that was previously proposed which would have forced unreasonably high prices for patients which promotes the need to continue marijuana sales on the black market.
Some remain worried about a proposed oversight board and licensing system, which is modeled after alcohol distribution and would not low direct transactions between growers and retail stores. Business would also have to pay state and local application fees.
Revenue from the 3 percent dispensary tax would be split between municipal governments (30 percent), counties (40 percent) and county sheriffs (5 percent) where medical marijuana compounds operate, along with the state (25 percent).
Application fees and yearly regulatory assessments are designed to cover the cost of implementation, administration and oversight of the medical marijuana business system, which also calls for new civil fines against licensees who violate the act.
There were 96,408 qualifying medical marijuana patients and 22,966 registered caregivers in Michigan at the end of the 2014 fiscal year, according to the Michigan Department of Licensing and Regulatory Affairs, which oversees the program.
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