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Michigan has barely made any money off marijuana. That ends next year.

Richard Clement

Nine years after the legalization of medical marijuana in Michigan, not only are the rules confusing, but state and municipalities with medical marijuana ordinances have made little revenue from the industry.

The product has not been taxed and the hundreds of dispensaries statewide are not yet legal, so no income tax has been collected, according to the Michigan Department of Licensing and Regulatory Affairs.

Cities such as Detroit have only collected money for issuing licenses for the businesses while the state has collected fees for medical marijuana cards. By law, these funds are to be used to administer the program and do not go into the general fund.

David Harns, spokesman for the Department of Licensing and Regulatory Affairs which oversees the Bureau of Medical Marihuana Regulation said the state collected $9.8 million in 2016 from medical marijuana card fees at $60 per card. Cards are renewed every two years.  

Revenue is expected to increase significantly starting next year when  the state rolls out five new licenses for marijuana businesses including dispensaries. The state will collect a 3 percent excise tax on gross receipts from dispensaries on top of the 6 percent sales tax.

RELATED: Reefer madness in Michigan. Marijuana shops face hazy future.

The businesses will be able to locate in municipalities that opt into the new licensing program. So far, nine municipalities have adopted ordinances to opt in..

Here’s how the marijuana tax revenue will be split up, according to a House Fiscal Agency analysis:

  • 30 percent to the state.
  • 25 percent to the cities that opt into the new licensing program and allow marijuana facilities.
  • 30 to the counties where facilities are located.
  • 5 percent the Sheriff’s offices in those counties.
  • 5 percent to the state police.
  • 5 percent to train local law enforcement officers.

The tax is expected to generate about $74 million,the House Fiscal Agency analysis shows: $24 million in pot taxes, plus $50 million from the state’s sales taxes.

RELATED: A budding market for risk-taking pot entrepreneurs

Michigan still has a long way to go to catch up to states that have been taxing marijuana for years. Oregon levies 17 percent on recreational marijuana  and made $60.2 million in 2016. Washington state, meanwhile, is expected to collect $730 million over the next two years from its 37 percent sales tax on marijuana.

The economic benefit of marijuana is the subject of debate. In Washington, for instance, more than 60 percent of the revenue from marijuana tax go to public health funds, while tens of millions more are dedicated to specific agencies.

“The remaining money that freely flows into the state general fund — about $211 million — adds up to about half of 1 percent of the state’s projected operating budget for 2017-19,” the Tacoma News Tribune wrote in February.

Other interest organizations, such as the Marijuana Policy Group, said marijuana can provide a huge economic boost. It claimed, for instance, that legalized marijuana in Colorado added 18,000 jobs and $2.4 billion in economic benefit.

In Detroit, the city had nearly 300 dispensaries until zoning changes drove the vast majority out of business since March 2016.  

Since dispensaries are illegal in Michigan until next year, they have not paid income taxes. But they did pay property taxes in Detroit, and closing dispensaries cost the city some $1.5 million in property taxes, according to Richard Clement, legislative assistant to Detroit City Council President Pro-Tem George Cushingberry.

“Weed is here to stay,” said Clement, a medical marijuana card holder. “The only question is, ‘What is the city going to get out of it?’”

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