Report claims medical marijuana could make $63 million for Michigan

Medical marijuana can generate up to $63 million for Michigan under strong regulatory framework, report finds


A strong regulatory framework for medical marijuana can generate up to $63.5 million a year in new revenue for Michigan, according to an economic impact analysis by renowned Hillsdale College economist Dr. Gary Wolfram released today.

“Michigan’s medical marijuana industry is growing and the state needs a strong regulatory framework that promotes accountability, safety and transparency,” said Wolfram. “This framework will create greater economic competition, generate much-needed revenue for the state, eliminate the black market and most importantly, give patients access to safe medicine.”

Wolfram’s analysis estimates that a robust free market medical marijuana industry with fair and open competition can generate between $44.3 million to $63.5 million a year in revenue for the State of Michigan. The framework is based on legislation currently being considered in the Michigan Legislature, House Bills 4209, 4210 and 4827.


The legislation establishes independent, separate tiers of commercial enterprises: provisioning centers (retailers), testing facilities, growers, processors and secure transporters (delivery services). None of these enterprises currently exist or are allowed under current state law.

“In 2008, Michigan voters overwhelmingly approved the use of medical marijuana for registered patients, and this proposed regulatory framework provides important clarification to Michigan’s law that has been absent for seven years,” Wolfram said. “The proposed framework will provide clarity for patients as well as the marketplace that will benefit Michigan and its citizens.”

The findings of Wolfram’s analysis include:

• The industry would generate more than $44.3 million a year based on the current patient population of 182,091 registered patients, according to the most recent 2015 data from the Michigan Department of Licensing and Regulatory Affairs, with the assumption that two-thirds of them would buy from a licensed provisioning center.

• If the proportion of current registered patents buying from licensed medical marijuana retailers increases to 80 percent, the revenue for Michigan exceeds $52 million.

• The analysis assumes that a more regulated, accountable and transparent medical marijuana system, with clear and consistent protections for patients and guidelines for businesses and law enforcement, will result in an increase in the number of registered patients. Should the number of registered medical marijuana patients in Michigan increase by 20 percent (to around 219,000 patients) the revenue for Michigan would be $63.5 million a year.

“As a medical marijuana business owner, I support a strong regulatory framework because it sends a signal to patients that they will have safe access to lab-tested medicine,” said Willie Rochon, vice president of the Michigan Cannabis Development Association. “The economic impact report released today shows that medical marijuana can also generate significant revenue for the State of Michigan under a framework that emphasizes accountability, transparency and economic competition.”

Wolfram’s analysis of the proposed legislation also found that municipalities would receive $4.4 million to $6.3 million; counties would get $5.9 million to $8.5 million; county sheriffs would receive $800,000 to $1.1 million; and Michigan’s General Fund would get $3.7 million to $5.3 million. The revenue distribution is based on an excise tax of 3 percent on all medical marijuana retailers, as proposed in the legislation.

The analysis was commissioned by the Michigan Cannabis Development Association, a statewide trade organization of medical marijuana businesses that support strong regulations and a level playing field for all businesses.

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Dr. Gary Wolfram is President of Hillsdale Policy Group, Ltd, and the William E. Simon Professor of Economics and Public Policy and the Director of Economics at Hillsdale College.  He is the authorof A Capitalist Manifesto: Understanding Market Economy and Defending Liberty, and has published numerous works on public policy issues.  He has served in several policy positions, including Michigan’s Deputy State Treasurer, member of the Michigan State Board of Education, President of the Board of Trustees of Lake Superior State University and Congressman Nick Smith’s Washington Chief-of-Staff. Dr. Wolfram received his Ph.D. in Economics from the University of California at Berkeley and has taught at the University of California at Davis, Mount Holyoke College, Washington State University, and the University of Michigan at Dearborn.


The Michigan Cannabis Development Association is a trade organization made up of Michigan business leaders and entrepreneurs in diverse sectors of the economy. It is united by a common goal of promoting a strong framework to regulate, inspect and license medical cannabis and cannabis businesses in Michigan. MCDA is focused on establishing a cannabis industry in Michigan focused on safety and responsibility while preventing industry monopolization. MCDA aims to prevent the unchecked proliferation of unregulated, unsafe and illegal “pot shops” and related illicit trade, and promote the safe and regulated distribution of lab-tested medical cannabis products to qualified, registered Michigan medical marihuana patients. MCDA partners with local communities and local law enforcement to prevent teen drug use, illegal and interstate drug trafficking, and drug crimes, and promotes safe city neighborhoods through community education, outreach and economic development. MCDA is governed by a code of ethics designed to ensure all member businesses uphold the highest standards of ethical, responsible and legal behavior.