Michigan Hashish Gross sales Prime $3B in 2023

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Michigan’s hashish gross sales whole final yr is greater than the gross home product of 51 nations.

This story was republished with permission from Crain’s Detroit and written by Dustin Walsh. 

Michigan ended 2023 because the nation’s unofficial marijuana king.

In 2023, the state’s hashish business bought practically $3.06 billion in medical and adult-recreational use marijuana — or about $305 value of marijuana for each man, girl and youngster within the state for the yr — in line with information launched at this time by the Michigan Hashish Regulatory Company.

Michigan’s hashish gross sales whole final yr is greater than the gross home product of 51 nations, practically reaching the GDP of the African nation of Burundi.

The yearly whole bought a lift from the perfect gross sales month on file in December. Michigan operators bought $279.9 million value of marijuana in December, up from $260.5 million in November.

The state’s per capita spend on marijuana in 2023 surpassed all different rival states, primarily based on year-end estimates. Californians had been projected to spend $5.9 billion in marijuana final yr, or roughly $150 per capita. Colorado stays closest to Michigan, at about $290 per capita spending on marijuana final yr.

Marijuana gross sales in Colorado have peaked. The state’s operators bought $2.23 billion value of marijuana in 2021, effectively above the 2022 whole of $1.77 billion. The state was projected to fall wanting the 2022 whole in 2023.

California, nonetheless, noticed extra marijuana gross sales in 2023 than in 2022, however the state is affected by the well-established illicit market that thrived earlier than legalization in 2018.

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Michigan’s market has but to peak. Marijuana gross sales appeared to sluggish and stabilize in August for the primary time since legalization, however December’s totals pushed the market to new heights, with a median month-to-month gross sales of $254.8 million for the yr. The market opened the yr in January 2023 with $207.3 million in gross sales, greater than 41% beneath December’s whole.

Earlier skilled projections have estimated that Michigan’s market will peak at $3.1 billion or $3.2 billion. This yr will doubtless decide whether or not the market plateaus or surpasses these projections.

Michigan’s success within the marijuana sport is correlated on to the state’s regulatory, tax and total enterprise framework.

Following the legalization of adult-use leisure marijuana by voters in 2018, Michigan’s framework solidified it into an infinite licensure state with comparatively low taxes.

The limitless licensure allowed companies to get permitted to function develop operations, processing crops and retail shops rapidly. There nonetheless are issues with native municipality enterprise licensing, however these roadblocks are eroding.

Michigan additionally taxes shoppers among the many lowest within the U.S. with a ten% excise tax on leisure marijuana gross sales. Colorado has a 15% excise tax on wholesale and retail gross sales. California has a 15% excise tax on wholesale and a per ounce tax on recent crops and cultivation. Different prime gamers like Washington and Oregon have a 37% excise tax and 17% excise tax on retail, respectively.

Although the state doubtless surpassed $1 billion in tax income final yr from marijuana gross sales because the first leisure marijuana dispensary opened in December 2019.

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In truth, weed is extra profitable to the state and communities than booze.

Throughout the 2023 fiscal yr, which ended on Sept. 30, the state of Michigan collected $73.6 million extra in leisure marijuana excise taxes in fiscal yr 2023 than beer, wine and liquor taxes mixed, in line with a Home Fiscal Company report launched in November.

The marijuana tax totaled $266.2 million, a 49.1% improve over the yr prior, and 38% larger than the $192.6 million collected from the gross sales of beer, wine and liquor within the state in the course of the fiscal yr.

The rising hole between beer, wine and liquor and leisure marijuana is consultant of Michigan’s highly effective marijuana client market, but in addition in how taxes are collected for every product.

Leisure marijuana is taxed at a ten% excise tax on the wholesale and client stage. Alcohol wholesales are liable for a $6.30 per 31-gallon barrel excise tax on beer and a $0.51-per-gallon excise tax on wine and champagne.

None of these taxes embrace the state’s 6% gross sales tax, which is collected on each hashish and alcohol on prime of any excise taxes.

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