How much U.P. cities are getting for having pot shops in 2023—and what some plan to do with it
LANSING, Mich. (WJMN) — The Michigan Department of Treasury announced this week that millions of marijuana tax dollars would be divvied out to local municipalities based on how many pot shops were licensed and operating in 2023.
For some communities in the Upper Peninsula, the windfall of cash will make a big difference to their bottom line.
The cash is coming from state taxes on adult-use marijuana products. Out of the $290 million available, $101 million will be sent to the School Aid Fund for K-12 education and another $101 million will go to the Michigan Transportation Fund.
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The remaining $87 million is being distributed between local municipalities, with $59,000 being handed out for each dispensary within its limits.
The top earners in the U.P. are the cities of Marquette, Menominee, and Sault Ste. Marie. Marquette and Menominee’s five stores earn the cities over $295,000, while Sault Ste. Marie’s four garners about $236,000.
The city manager in Marquette Karen Kovacs told Local 3 that since legalization, the city has expected about $200,000 per year in marijuana tax income. This year, the $95,000 surplus will help offset reserve spending that was already built into the budget.
Upper Peninsula Marijuana funds
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Big check for a little city
If the impact is significant for people in Marquette and the Sault, then it is doubly so for Menominee, a city less than half of Marquette’s size at a population of about 8,000 residents.
“It goes a long way to getting our finances back to normal,” said Casey Hoffman, Menominee’s new mayor. He told Local 3 the $295,000 bonus is more than enough to cover the city’s average deficit of $250,000 over the past five years.
One of Hoffman’s financial focuses coming into office was the funding of the Spies Library. “It’s personal to me,” Hoffman said. “It provides something special to the community. My mother worked there. When I was appointed to the library board, it was my first job in politics.”
In 2023, Hoffman said the ongoing financial hardships of the city led to the Spies Library to be the first department to receive no funding to operate from the city’s general fund. After community pushback, Hoffman says the city doled out $50,000, and supplemented the rest with $200,000 from the library’s donations savings account.
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“This money should be spent on children’s books, not keeping the lights on,” said Hoffman. “We’re spending charitable donations on non-charitable purposes, and I’ve got an ethical problem with that.”
While Hoffman said no solid plan was in place for the marijuana tax dollars on its way, the library will likely be less dependent on its donations however the state funds are spent.
“We do need to recognize that this is all temporary.”
“Our number one priority is expanding our tax base,” said Hoffman. A concern for Menominee unique to Upper Peninsula border towns is the marijuana industry’s reliance on interstate travel from customers in Wisconsin, where the drug is still illegal.
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While the prime real estate of the small city’s proximity to Green Bay has entangled the city in years of litigation with warring marijuana companies, it has also provided dozens of jobs, tax dollars, and peripheral business.
“We do need to recognize, though, that this is all temporary,” said Hoffman. “When the state of Wisconsin legalizes marijuana, the amount of dispensaries in the City of Menominee will reduce precipitously, perhaps even by half or greater.”
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State legislators on both sides of the aisle have shown support and proposed plans for marijuana legalization in some form, but no bills have yet gathered enough meaningful support.
Local 3 has reached out to city leaders in Sault Ste. Marie, and will add any updates received to this story.
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