Cannabis Taxes in Michigan: Where the Money Goes in 2025
As Michigan’s adult-use cannabis market matures in 2025, tax revenues are playing a critical role in funding statewide priorities and empowering local communities. With over $331 million garnered in fiscal 2024 from the 10% excise tax and licensing fees, Michiganders have a clear line of sight into how this groundbreaking revenue is allocated—supporting everything from classrooms to roads and civic services.
1. The Structure of Cannabis Taxes in Michigan
Under the Michigan Regulation and Taxation of Marihuana Act (MRTMA), cannabis products are subject to:
- A 10% excise tax
- A 6% state sales tax (reddit.com, bigrapidsnews.com, michigan.gov)
Notably, there are no additional local cannabis excise taxes—so buyers aren’t paying extra just because a store is in their town (taxpolicycenter.org).
2. Major Funding Streams from Excise Tax Revenue
In 2024, the state’s Marihuana Regulation Fund collected over $331 million from the 10% excise tax and related fees (michigan.gov). Those dollars are dispersed across four key areas:
| Recipient | Percentage | 2024 Allocation (≈) |
|---|---|---|
| Municipalities & tribes | 15% | ~$50 million |
| Counties & tribes | 15% | ~$50 million |
| School Aid Fund (K–12 education) | 35% | ~$116 million |
| Michigan Transportation Fund | 35% | ~$116 million |
This formula channels nearly $100 million directly to local jurisdictions, while larger shares fuel statewide infrastructure and education projects.
3. Deep Dive: Local Disbursements
In February 2025, Michigan Treasury began distributing the local share—$58,200 for each licensed retail or microbusiness—to municipalities, counties, and four federally recognized tribes (bigrapidsnews.com, michigan.gov). The approach is strictly license-based, not population-based; thus, more licensed operations mean more funds for a locale.
- Lansing (Ingham County), for instance, received approximately $1.4 million in 2024 thanks to 24 licenses .
- Counties like Mecosta, with 12 stores, secured $698,743 (bigrapidsnews.com).
- Even smaller townships with only one store enjoyed a windfall of $58,228 (michigan.gov).
Importantly, local entities have full discretion over how to spend these funds—whether on roadwork, public safety, parks, nonprofit grants, or fire equipment (bigrapidsnews.com). For example, Mecosta County used some of its funding to purchase a fire department pickup and fund nonprofit services (bigrapidsnews.com).
4. State-Level Investment: Schools & Infrastructure
Beyond local use, Michigan commits 35% of excise tax revenue to each of two statewide funds: the School Aid Fund and the Michigan Transportation Fund. In 2024, these funds each received over $116 million to bolster K–12 education and maintain roads, bridges, and transit systems (michigan.gov).
5. Why This Matters
This well-designed tax structure ensures that cannabis revenues benefit both local hotspots and the broader population:
- Boosts host communities with school funding, public works, and flexibility to address local priorities.
- Empowers statewide infrastructure, improving safety and connectivity across Michigan.
- Supports K–12 education, addressing classroom needs and educational equity.
- Advances tribal participation—2025 saw tribal distributions for the first time, totaling over $931K (cannabizcredit.com, michigan.gov).
6. The Outlook: Growth & Emerging Challenges
In just one year, Michigan saw more than a 40% jump in cannabis tax revenue in 2023, totaling over $270 million(upnorthlive.com). That trend continued in 2024. However, rising calls for new taxes, such as a proposed wholesale tax, could disrupt this balance—potentially reducing local receipts (lansingcitypulse.com).
7. What The Botanical Co. Offers
At The Botanical Co., we’re proud to be part of this cycle of community impact. Each purchase you make not only supports quality cannabis—it directly contributes to local roads, schools, first responders, and nonprofits. We believe in transparent, responsible commerce—and reinvesting in Michigan’s future.
Final Takeaway
Cannabis taxes in Michigan aren’t just a price tag—they fund real change. With 35% flowing into schools, 35% into infrastructure, and 30% staying local, your cannabis purchase is an investment in every corner of the state—supporting education, transportation, safety, and community well‑being.