Lawmakers approve marijuana tax hike to fund Michigan road construction

(FOX 2) - A proposal to tax marijuana to fund road construction in Michigan breezed through the state House after lawmakers voted overwhelmingly for a 24% tax on wholesale cannabis purchases.

The measure would raise hundreds of millions of dollars in pursuit of more funding for road construction.

Big picture view:

Amid a flurry of deal-making on the state budget, representatives in the Michigan state House approved the Comprehensive Road Funding Tax Act.

Under HB 4951, a 24% tax rate on the wholesale price of marijuana would go into effect at the beginning of next year. It cleared the chamber during a Thursday vote.

A fiscal analysis of the plan estimates it would generate $420 million a year.

The bill would allocate $3 million for implementing the plan while the remaining money would go into a Neighborhood Road Fund to pay for construction costs.

Dig deeper:

When marijuana was legalized for recreational adult use in 2019, it included a 10% excise tax on all sales. A third of the revenue goes to schools, another third is sent to roads, while the last portion is distributed to local governments that have at least one cannabis business.

Michigan sells more marijuana than almost any other state. This year, cannabis sales led to $100 million for local communities.

Both Gov. Gretchen Whitmer and lawmakers have said more road funding would be part of the latest budget negotiations.