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Michigan Racial Equity Group Introduces New Initiatives To Boost Diversity In Cannabis

January 20, 2021 2:44 pm
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Michigan Racial Equity Group Introduces New Initiatives To Boost Diversity In Cannabis

Michigan's state-led Racial Equity Advisory Workgroup has released recommendations to encourage more diverse ownership, according to Crains Detroit

The recommendations come, in part, through parameters in the state's 2018 legalization act that stipulates ownership encouragement and involvement for the state's most affected communities.

Currently, just 3.8% of Michigan's recreational market is comprised of Black ownership. Brown owners make up only 1.5%, according to December data from the Michigan Marijuana Regulatory Agency.

Related link: How Much Could Michigan Gain In Marijuana Tax Revenue?

What's In The Recommendations

The workgroup put forth a series of recommendations. They include:

  • Reinstating a 3% excise tax on medical sales, which would have generated nearly $10 million last year if in place.
  • Creating a new 1.5% intra-trade excise tax on the adult use market.
  • A new tax distribution system, with 30% going to the new state operated social equity program. The city where a business operates would receive 25% of the taxes, while the county received 30%. The sheriff's department would receive 5% and the remaining 10% would go to a state medical cannabis research fund.
  • As part of license renewals, large-scale operators would have to ensure that they purchase a portion of their supplies from diverse providers.
  • Creating a state-run crowdfunding platform to connect investors and businesses in communities most economically affected.

Related link: Why Social Equity Matters For Cannabis, And What States Are Doing About It

What's Next?

Analysts note that some taxation parameters would require legislative action and predict that business pushback is expected on any new taxes.