MUSKEGON, MI – The marijuana industry brought nearly $290,000 in revenues to the city of Muskegon last year and about $40,000 of it will be spent on social equity programs, including expungement clinics and grants to those with marijuana convictions.
The vast majority of the revenues to city government – from excise taxes and licensing fees – went into the general fund to pay for various city expenses, Muskegon Finance Director Kenneth Grant told MLive.
The city commission adopted a policy to spend 35% of its excise tax revenues on a three-pronged social equity program, said Muskegon Planning Director Mike Franzak, who oversees the city’s marijuana businesses. That program includes grants and loans, expungement 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. That money went quickly.”
Last year, the city received $112,000 in excise tax on recreational marijuana sales, of which it is spending $39,200 on social equity. It also received $177,000 in licensing fees from medical and recreational marijuana establishments, including grow operations, processing businesses, microbusinesses that grow and sell, and retail establishments.
That means nearly $250,000 went to pay 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 funneling additional marijuana tax revenues to social programs.
“We know that some of the expungement clinics here have been very well attended,” he said. “There are still a lot of people out there who need help.”
The city could receive more in excise tax revenues from the state, which distributes the funds based on a community’s 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 at the time the money was distributed. Now it has about a dozen, Franzak said.
Nine recreational dispensaries currently are operating in the city.
“I would expect additional funding,” Franzak said.
The city has strict landscaping and streetlight requirements for dispensaries, and sometimes it’s more cost effective and uniform for the city to do some of the landscaping and decorative streetlight placement itself, Franzak said. As a result, some dispensaries have given the city money to do the work, and streetscaping revenues have totaled $58,255.
The city plans to spend some of that money to install 12 streetlights on the bike trail 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 for marijuana educational displays on city-owned message boards and 5,000 bags with locks for safe-keeping of cannabis.
The display messages will touch on such subjects as not using marijuana before driving or working or while pregnant. The bags will be given out to dispensaries for distribution to their customers, Franzak said earlier.
The city also has several loans and grants under its social equity program:
- Education and training scholarship. The $5,000 grant reimburses such costs as tuition or job skills training upon successful completion of the program. Applicants must have been a Muskegon resident for at least 12 of the prior 48 months and have had a previous “low-level” marijuana conviction.
- Business start-up grant. The $5,000 grant can be used for various costs, including equipment, business plan development, business training courses and architect fees. It also can be used for rental assistance. Applicants must have had a previous low-level marijuana conviction.
- Business start-up loan. 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 Muskegon resident for at least 12 of the prior 48 months and have had a previous “low-level” marijuana conviction.
- Marijuana equipment grant. Up to $10,000 is available as reimbursement for growing equipment, office needs and more that are needed to operate a marijuana facility in the city. Applicants must have had a previous low-level marihuana conviction or be designated as a social equity applicant by the State of Michigan.
- Marijuana license grant. Up to $10,000 is available to help pay the fees for obtaining a local or state marijuana license. Applicants must have had a previous low-level marijuana conviction or be designated as a social equity applicant by the State of Michigan.
To be a social equity applicant designated by the state, an individual must have been a resident of a community disproportionately impacted by prior marijuana laws, of which Muskegon is one, for at least five of the previous 10 years; have a marijuana conviction; or be a registered medical marijuana caregiver.
For a grant or loan application, click here.
The city allocated $11,760 for the grants and loan program and spent most of the money by giving out two $5,000 grants last year, Franzak said.
There’s some indication the city commission will decide to allocate more money to the grants and loans program, Franzak said.
The city of Muskegon also allocated $13,720 for marijuana conviction expungement clinics, which haven’t been conducted yet and may be coordinated with clinics offered by Muskegon County, he said. The clinics help individuals prepare court paperwork needed for expungement.
“We’ll be meeting in the next couple of months to discuss how these programs went and how we anticipate spending the money for next year,” Franzak said.
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