Recreational marijuana sales in Michigan exceed $1.6 million in first 8 days

Kathleen Gray | Detroit Free Press

Show Caption Hide Caption Advice for first time recreational marijuana buyers Metro Detroit marijuana shops give advice to first time recreational marijuana buyers.

In the first eight days of legal weed sales, $1.6 million of recreational marijuana was sold at the five retail shops open around the state.

And three of those shops either sold out or had limited supplies of cannabis products.

The sales from Dec.1-8 totaled $1,629,007 and brought in $162,900 from the 10% state excise tax and $107,514 from the 6% state sales tax.

The state House Fiscal Agency has estimated that when the recreational market for marijuana is fully established after 2020, annual sales will approach $949 million, bringing in $94.9 million from the 10% excise tax and $57 million from the 6% sales tax.

According to the ballot proposal approved by voters in 2018, the first $20 million from the 10% excise tax, in the first two years of recreational marijuana sales, will go to research on the benefits of marijuana to treat ailments such as post-traumatic stress disorder.

The remainder of the excise tax will be split between payments to cities and counties that allow marijuana businesses in their towns, the school aid fund and the transportation fund to improve roads. But the House Fiscal Agency projected that the projected tax totals — $97.5 million in 2020, growing to $163 million in 2023 — are a small fraction of the state’s $60 billion budget.

The projected revenues from the 6% sales tax — from $59 million in 2020 to $98 million in 2023 — are earmarked for the school aid fund; revenue-sharing payments to cities, townships, villages and counties, and the state’s general fund.

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It’s hard to say definitively how the first day of Michigan’s legal marijuana market, which attracted more than 2,200 customers, compares to other legal states in the nation. Colorado, the first state to legalize marijuana for adult recreational use, recorded about $1 million in sales on the first day on Jan. 1, 2014. But that total came from 24 stores that had been licensed by the state.

Michigan had three stores in Ann Arbor — Greenstone Provisions, Arbor Wellness and Exclusive Brands — operating on the first day of marijuana sales for adult recreational use. In addition, Michigan Supply and Provision in Morenci, just north of the Ohio border, opened for a couple hours on the evening of Dec. 1 and a fifth shop — Lit Provisioning — opened in the northern Michigan town of Evart on Friday.

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Greenstone sold out of marijuana flower several days in a row, Michigan Supply and Provision had a very limited supply of only marijuana flower and Lit sold out of products after the first two days of sales with 750 customers, spending an average of $103 each.

“We are humbled that our first weekend of adult-use sales at Lit Provisioning Centers in Evart was so well- received,” said Doug Hellyar, president and chief operating officer of Lume Cannabis Company, which owns the Lit shop. “People traveled from across the state, braved the cold and stood in line for hours to be among the first to purchase recreational marijuana in Northern Michigan.”

The sales come just over a year after Michigan voters approved a ballot measure that legalized marijuana use, possession, growing and sales by a 56%-44% margin. Michigan became the 10th state in the nation to legalize weed for adult recreational use.

The state began accepting applications for recreational marijuana business licenses on Nov. 1 and has since awarded 21 licenses and pre-qualified another 73 applications. But more than 1,400 of the state's 1,771 communities have said they don't want marijuana businesses in their towns, so finding a city that's amenable to legal weed has been a challenge for businesses.

Many cities are holding off while local leaders develop ordinances that will govern marijuana businesses and others have said yes to marijuana, but are going through the process of deciding which businesses will be allowed in.

Contact Kathleen Gray: 313-223-4430, kgray99@freepress.com or on Twitter @michpoligal.