Find out how Muskegon spends nearly $290,000 in marijuana revenue

MUSKEGON, MI – The marijuana industry brought nearly $290,000 in revenue to the city of Muskegon last year and about $40,000 will be spent on social equity programs, including wipeout clinics and grants to those convicted of marijuana.

The vast majority of city government revenue — from excise taxes and license fees — went into the general fund to pay for various city expenses, Muskegon chief financial officer Kenneth Grant told MLive.

The city commission has adopted a policy to dedicate 35% of its excise tax revenue to a three-pronged social equity program, said Muskegon planning director Mike Franzak, who oversees marijuana businesses. from the city. This program includes grants and loans, radiation clinics, and community education and safety efforts.

“I think the social equity program has been great, especially for those who have been hurt by marijuana prohibition,” Franzak said. “We saw that for the grant program. This money is gone quickly.

Last year, the city received $112,000 in excise tax from recreational marijuana sales, including $39,200 in social equity. He also received $177,000 in licensing fees from medical and recreational marijuana establishments, including grow operations, processing companies, micro-businesses that grow and sell, and retail establishments.

That means nearly $250,000 went toward general city expenses, including the costs of regulating and inspecting local marijuana businesses.

Franzak said he plans to meet with city commissioners soon to discuss channeling additional marijuana tax revenue to social programs.

“We know some of the radiation clinics here have been very busy,” he said. “There are still a lot of people who need help.”

Related: Lock bags of marijuana, bulletin board messages part of Muskegon’s cannabis education outreach

The city could receive more revenue from the state’s excise tax, which distributes funds based on the community share of recreational marijuana retail licenses statewide. In fiscal year 2020, the 10% tax was levied on $341 million in recreational sales, and communities received $28,000 per license.

Muskegon had four licenses when the money was distributed. Now he has about a dozen, Franzak said.

Nine recreational dispensaries are currently operating in the city.

“I would expect additional funding,” Franzak said.

The city has strict landscaping and street lighting requirements for dispensaries, and sometimes it is more cost-effective and uniform for the city to do some of the landscaping and placement of decorative streetlights itself. , Franzak said. As a result, some dispensaries donated money to the city to do the work, and the townscape revenue totaled $58,255.

The city plans to spend some of that money installing 12 streetlights on the bike path along Laketon Avenue where several dispensaries are clustered, Franzak said.

Earlier this month, Muskegon city commissioners agreed to spend $13,700 of its social equity allocation on educational postings about marijuana on city-owned message boards and 5,000 bags with locks. for the safe storage of cannabis.

Messages displayed will address topics such as not using marijuana before driving or working or while pregnant. The bags will be given to dispensaries for distribution to their customers, Franzak said earlier.

The city also has several loans and grants under its social equity program:

  • Scholarship and training. The $5,000 grant reimburses costs such as tuition or job training upon successful completion of the program. Applicants must have been a resident of Muskegon for at least 12 of the previous 48 months and have a prior “low-level” marijuana conviction.
  • Assistance in setting up a business. The $5,000 grant can be used for a variety of costs, including equipment, business plan development, business training courses, and architect fees. It can also be used for rental assistance. Applicants must have had a prior low-level marijuana conviction.
  • Ready to start a business. Interest-free “gap” loans of up to $25,000 are available to supplement traditional financing through a third party. Loans must be repaid within 60 months. Applicants must have been a resident of Muskegon for at least 12 of the previous 48 months and have a prior “low-level” marijuana conviction.
  • Marijuana Equipment Grant. Up to $10,000 is available as reimbursement for grow equipment, office needs and more needed to operate a marijuana facility in the city. Applicants must have previous convictions for low marijuana use or be designated as social equity seekers by the State of Michigan.
  • Marijuana Licensing. Up to $10,000 is available to help with the cost of obtaining a local or state marijuana license. Applicants must have previous convictions for low marijuana use or be designated as social equity seekers by the State of Michigan.

To be a state-nominated social equity nominee, an individual must have resided in a community disproportionately affected by previous marijuana laws, of which Muskegon is a part, for at least five of the past 10 years; have a marijuana conviction; or be a registered medical marijuana caregiver.

To apply for a grant or loan, click here.

Related: A new marijuana dispensary approved for Muskegon operated by a local businessman

The city allocated $11,760 to the grants and loans program and spent most of the money on two $5,000 grants last year, Franzak said.

There are indications that the city commission will decide to allocate more money to the grant and loan program, Franzak said.

The city of Muskegon has also allocated $13,720 for marijuana conviction expungement clinics, which have yet to be conducted and could be coordinated with clinics offered by Muskegon County, he said. Clinics help individuals prepare the court documents needed for expungement.

“We will be meeting in the coming months to discuss how these programs are going and how we plan to spend the money for next year,” Franzak said.

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