Detroit needs to wake up and smell the weeds — yes, as in marijuana — because that’s where the money is. But the way things are going, this city could find itself missing out on millions of dollars in tax revenue over the coming years that we quite seriously cannot afford to be missing out on.
But the suburbs? Many of them are set up to profit from the coming green wave just fine. More on that a little later.
Meanwhile, you should probably know that out of an estimated 154 medical marijuana dispensaries currently operating in the city, no more than five of them are black owned, according to Ron Jones of Sons of Hemp, a Detroit-based activist organization focused on educating Detroiters about the seriousness of the marijuana legalization issue and what it could mean for Detroit. In a nutshell, the way Detroit’s ordinance governing medical marijuana inside the city is currently set up, Detroiters are potentially being set up to allow themselves to only be consumers of marijuana once it almost inevitably becomes legal throughout the state, while those outside the city limits will control all the aspects of the business that provide the jobs and make all the real money.
We’re about to get screwed, in other words.
“So at the moment money is just flowing out of our city and it’s not serving our citizens, and why it’s so important is that according to the ACLU, black people are 3.73 times more likely to be criminalized over marijuana possession,” said Detroit mayoral candidate Ingrid LaFleur, a local artist and activist who is also actively campaigning for legalization.
“There’s a lot of money they’re making, the incarceration system, off of black bodies. And so since we’ve been targeted by the war on drugs, I think this is imperative for our city that is 85 percent black that we be really strategic about how this industry is showing up in our city. They’re predicting that by 2021 the cannabis industry will reach about $50 billion.”
Here’s the thing: We need to keep in mind that just because Detroit got out from under bankruptcy doesn’t mean we now have tons of revenue pouring into our coffers. It just means we cleared the debt off our deck. The revenue-generating part of the equation hasn’t quite been worked out yet.
According to the 2015 City of Detroit Consensus Revenue Estimating Conference draft report, “The region’s economy is in a slow recovery. …Overall, Detroit’s employment base remains 8 percent below its pre-recession peak.” Then factor in the still (extremely) weak property tax base with so many homes still underwater and the majority of homes being sold for cash.
etc., etc., etc.
In short? It doesn’t look good.
If the polls are any indication, it’s only a matter of time — and not a lot of time, at that — before Michigan joins the ranks of those states where recreational use of marijuana becomes legal. And if Denver, Colorado — just one example — is any indication, then there are potentially hundreds of millions of cannabis tax dollars just waiting to be harvested from communities throughout Michigan. Hundreds of millions of tax dollars that can be reinvested in those communities. Communities like Detroit.
“According to a new report from New Frontier Data, states with legalized marijuana are on track to generate approximately $655 million in state taxes on retail sales in 2017. Within that tax figure, $559 million will come just from cannabis taxes, much more than from alcohol taxes.
“The report also forecasts that tax revenues in states with legalized marijuana will reach $1.8 billion, of which $1.4 billion will be from cannabis specific taxes.”
And this from Market Watch:
“The Colorado Department of Revenue announced Thursday the state’s revenue had pushed past $1 billion. Colorado legalized recreational marijuana in 2012, along with Washington state, and this was its third year of regulated sales. In its first year, revenue hit $699.2 million, followed by $996.2 million the second year.
“This money is just the tip of the iceberg. Hopefully, this will be a wake-up call for the 42 states that still choose to force marijuana sales into the criminal market and forego millions of dollars in tax revenue,” said Mason Tvert, the Marijuana Policy Project’s Denver-based communications director, in a statement. “The state received nearly $200 million in marijuana tax revenue, whereas just a decade ago it was receiving zero.”
“Overall, U.S. marijuana sales grew 30% in 2016, according to data from Arcview Market Research. And using research from cannabis business intelligence and market research firm BDS Analytics, Arcview forecasts cannabis sales will grow at a compound rate of 25%, from $6.7 billion in 2016 to $20.2 billion by 2021.”
In Michigan, an EPIC-MRA poll conducted in February showed a support of 57 percent for legalization of marijuana. If that upward trend holds, as was reported in a recent Metro Times article, then the issue of full legalization is likely to easily get the required amount of signatures needed to place it on the ballot in 2018. The provisions included in the initiative are the legalization of possession, cultivation and use for adults; legalization of growing industrial hemp; the licensing of businesses to grow, process, test, transport and sell marijuana; a call for testing and safety regulations for retail sales, and to set up a 10% excise tax and a 6% sales tax for education, roads, and local governments.
And so, I just want to know again what the opposition to legalization is in this city, because if it’s on moral grounds, that just doesn’t work for me. Not only because liquor gets a pass, not to mention the casinos, but because — at least as far as I know — those promoting the morality argument don’t have anything to offer to replace that revenue. And if you feel comfortable standing in the way of multiple millions of dollars in potential revenue, not to mention jobs, for a broke black city like Detroit, then I think those standing in the way have an obligation to present an alternate plan that can generate an equivalent source of revenue.
“We in the black community have been in survival mode for so long, and this could be an opportunity to give us some economic stability to get us on this path of healing and being able to pass on to future generations,” said LaFleur.
Andre Godwin, also with Sons of Hemp, agrees.
“Our main thing is the businesses should reflect the community,” he said. “It’s a city of Detroit issue. It’s a big economic issue.”
Godwin said that the immediate issue the Detroit community needs to focus on is coming up in a matter of months. Because in September, or no later than October, the State of Michigan will issue applications for the five available licenses related to medical marijuana. Those license applications must be turned into the state no later than Dec. 15.
The five licenses that are available are cultivation (required for growers), processing (for making extracts, such as edibles), dispensaries, safety and compliance, and security and safe transport. According to Godwin and Jones, Detroit currently only has language in its ordinance allowing licensing for dispensaries, and that is problematic because the language in the city’s ordinance does not reflect the language in the state ordinance.
What this means is that, unless this is corrected by Detroit City Council, Detroit won’t be able to effectively do anything with weed except smoke it. While surrounding cities like Garden City, Allen Park, Romulus and Warren, all of which have their ordinance language ready to make it possible for their residents to apply for all five licenses, will be off and running.
Leaving Detroit stuck in the gate with nothing better than weeds and stems.