Many Michigan communities have decided to ban cannabis stores

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Nearly 1 in every 8 communities in Michigan have decided not to allow cannabis businesses and retail stores within their limits.

A large number of communities in Michigan decided to opt out of the recreational marijuana market, for now.

Roughly 400 Michigan communities decided that the wording on the ballot was way too liberal for them to allow businesses to operate there.

Namely, the wording on the ballot says that communities can either prohibit businesses entirely or limit the number of licenses available for businesses.

The ballot didn’t clearly define if communities can accept some categories of licenses and reject others, which is why they preventively opted out.

“Municipalities have the authority to limit the types of facilities, not just the number and if they want to limit the number to zero, they’re free to do so,” said John Fraser, an attorney with Grewal Law in Okemos.

Eric Foster, director of strategy and business development at the Southfield consulting firm Banks & Company, said that the state’s interpretation of the law is way too broad.

He also pointed out how this will lead to even more municipalities opting out and even more troubles for Michigan’s young recreational cannabis market.

The state Department of Licensing and Regulation found that in the 4 months since Michigan legalized adult use marijuana roughly $42 million dollars worth of sales were recorded.

Extension for the dispensaries

Even though more than 400 communities decided to prohibit recreational marijuana businesses from their towns, medical marijuana shops won’t be going anywhere, not even the illegal ones.

About 50 unlicensed shops in Michigan were scheduled for closure by regulators, but a Michigan Court of Claims Judge, Stephen Borrello, signed a temporary restraining order Thursday that prevents state regulators from enforcing a licensing deadline.

Michigan officials tried to impose a deadline for licensing these shops since September 2018, but the courts postponed and pushed back the date multiple times due to legal challenges.

David Harns of Michigan’s Department of Licensing and Regulatory Affairs also pointed out how Michigan is the second-largest medical marijuana market in the nation with nearly 300,000 registered medical users.

It’s also important to know that the state’s 3% tax on medical cannabis has been ended, as voters decided the excise tax would be eliminated 90 days after recreational weed became legal.

Also keep in mind that both recreational and medical cannabis will still be subject to the excise tax. This time, however, medical cannabis will be taxed at 6%, while recreational will be taxed at 10%.

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