Michigan To Use $20M In Marijuana Tax Revenue On Medical Research After All

Michigan To Use $20M In Marijuana Tax Revenue On Medical Research After All

In this Sept. 25, 2018 photo, a worker holds a marijuana plant leaf in a massive tomato greenhouse being renovated to grow pot in Delta, British Columbia, that is operated by Pure Sunfarms, a joint venture between tomato grower Village Farms International, and a licensed medical marijuana producer, Emerald Health Therapeutics. On Oct. 17, 2018, Canada will become the second and largest country with a legal national marijuana marketplace. (AP Photo/Ted S. Warren) APAP

By Gus Burns | fburns@mlive.com

The instructions from voters as to what Michigan leaders should do with the newfound recreational marijuana tax revenue were clear.

After paying to establish the Marijuana Regulatory Agency and licensing enforcement at a cost of about $12.4 million, the next $20 million was to fund clinical trials focused on treating veterans for pain and PTSD with marijuana, and to study the plant’s effects on suicide rates among military personnel, which are nearly 50% higher than among the general public, according to some studies.

The Marijuana Regulatory Agency and state Treasury last week outlined how the state would disburse nearly $45 million accrued in tax, application, licensing and renewal revenue from recreational marijuana sales. None of it was slated to go to clinical trials.

Some marijuana industry insiders who helped write the law became concerned and began looking for answers.

While the research funding was conspicuously missing from the plan, the Marijuana Regulatory Agency has since said $20 million is now earmarked for dispersal over the next year.

“The $20 million has been appropriated and the (agency) is in the process of issuing the request for proposals to access funding,” Marijuana Regulatory Agency Director Andrew Brisbo said Monday. “We expect the first round of distributions will occur this fiscal year.”

The fiscal year runs through September.

The licensing agency said a “dispersal mechanism” wasn’t yet in place to distribute the research funds earlier.

The law states that “until 2022 or for at least two years” $20 million in tax revenue should go to research.

“We wanted to stimulate the scientific community with an influx of cash in order to help people that we recognize really did need some assistance they weren’t receiving,” said Rick Thompson, a board member with the Michigan National Organization for the Reform of Marijuana Laws (NORML), the group that advocated for recreational marijuana legalization and the studies.

The initial indication that he research money wasn’t there worried some, including Dr. Sue Sisley, a former Michigan resident who’s currently running marijuana and psilocybin trials at the Scottsdale Research Institute in Arizona with the goal of obtaining FDA approval for the medical use of smokable marijuana.

While the majority of U.S. states have some form of medical marijuana program, the federal government contradictorily still labels marijuana as a Schedule 1 drug, the definition of which states there is “no currently accepted medical use.” The U.S. House in December passed the Marijuana Opportunity Reinvestment and Expungement Act of 2019, which, if approved by the Senate and signed by the president, would remove the Schedule 1 limitations.

After hearing Michigan’s clinical money is expected to be distributed this year, Sisley said some of her concerns over the issue have been alleviated.

Thompson said the law was crafted with Sisley’s trials in mind. The specific language of the law says the money should go to “a non-profit organization or researcher within an academic institution researching the efficacy of marihuana in treating the medical conditions of U.S. armed services veterans and preventing veteran suicide.”

“We told them exactly where the money was supposed to go,” Thompson said. “I was completely surprised to learn they had distributed the monies to cities, but not allocated the monies to research programs.”

Despite stated plans to move forward with issuing the trial money, Thompson said it’s an “unsatisfactory answer.”

“It’s been known that this allocation was required for about two years and they’ve had plenty of time to get it done,” he said.https://datawrapper.dwcdn.net/x9OJe/1/

Clinical trials

Sisley, whose work is assisted by the nonprofit Multidisciplinary Association for Psychedelic Studies (MAPS), said tax-supported clinical trials for marijuana have taken place in other states, and she hopes the selection process in Michigan remains clear and transparent.

“We are just one among hundreds of scientists that will be applying for this,” Sisley said. “We have no idea what the criteria are, we have no idea who is on the selection committee (will be).

“I hope that the (Marijuana Regulatory Agency) will give the public a chance to participate in the process, as they have in other states that have issued research money. It is usually a completely transparent process.”

Government tax revenue collected in recreational marijuana excise taxes totaled $31 million in fiscal year 2020. When application and licensing fees were added, the total jumped to $45.7 million, according to the state Treasury.

Michigan voters approved recreational marijuana commerce in a 2018 law that included a 10% excise tax on all sales. Between Dec. 1, 2019, the day the first sales began, and Sept. 30, the end of the 2020 fiscal year, the industry tallied more than $330 million in sales.

The law also provided a specific breakdown as to how those tax funds should be allocated: 15% to local municipalities that allowed recreational sales; 15% to counties, 35% to the education fund and 35% to the transportation fund.

The municipal breakdown was prorated based on the number of retail businesses in the community versus the total number statewide, which worked out to about $28,000 in tax revenue per retail business.

The transportation and education funds are slated to receive $11.6 million each, with the remaining $12.5 million headed to the Marijuana Regulatory Agency, which Gov. Gretchen Whitmer created to regulate the market for startup and administrative costs.

Based on recreational sales through December, state tax revenue from recreational marijuana this year is on pace to more than double.

Michigan To Use $20M In Marijuana Tax Revenue On Medical Research After All

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