Published in Economic Development

Marijuana legalization backers optimistic about putting issue to Michigan voters in 2018

BY Sunday, June 25, 2017 08:00pm

Backers of a marijuana legalization ballot initiative in Michigan say they have the financial and grassroots support necessary to put the question before voters in 2018.

An unsuccessful attempt in 2016 gathered roughly 350,000 signatures but did so outside of the required 180-day timeframe. MILegalize, the group behind the 2016 effort, is now working with the Washington, D.C.-based Marijuana Policy Project as part of a new group, the Coalition to Regulate Marijuana Like Alcohol. They’re hoping to raise millions of dollars to pay signature-gatherers this time around and for what could be an expensive campaign leading up to the 2018 General Election, should the signatures get collected.

The coalition’s political director is Jeff Irwin, a former Democratic state representative from Ann Arbor who worked closely on marijuana issues while in the Legislature.

“I thought this was an important reform to make when I was in office, and it’s one I’m proud to be advancing,” Irwin said.

The group is roughly a month into its 180-day campaign to get 252,523 signatures from registered voters. Its first campaign finance reports are due in July, which will offer a glimpse into the early fundraising efforts of the coalition.

If the signatures are gathered, “the longer, second phase of the campaign is where there is going to be a lot more persuasion involved,” Irwin said of opposition likely coming from public health and law enforcement groups. 

“One thing I’ve seen is that the public is way ahead of politicians on this issue,” he said. “Our focus now is on securing ballot access. Then we can have a nice, long, detailed conversation about why (legalization) is better.”

Specifically, the initiative would allow for the personal possession, cultivation and use of marijuana for those age 21 and older — as well as the cultivation of industrial hemp — setting up different classes of growers based on the number of plants. It also creates a licensing system for growing, processing, testing, transporting and selling marijuana similar to a process that’s coming for the medical cannabis sector in Michigan.

Residents would be able to purchase up to 2.5 ounces at a time, although individuals would be able to keep up to 10 ounces in their homes.

Retail sales of cannabis would come with a 10-percent excise tax in addition to the state’s 6-percent sales tax. A “marihuana regulation fund” would be created within the state treasury for collecting tax revenue and fees. Revenues would be distributed to municipalities (15 percent) and counties (15 percent) that allow retail stores or “microbusinesses,” the school aid fund (35 percent) for K-12 education, and the Michigan transportation fund (35 percent) for road repairs and maintenance. Estimated tax revenues could be between $100 million and $200 million, according to the coalition.

The system essentially will be separate from the state’s medical marijuana regulatory structure for commercial entities, Irwin said.

“As it’s written, the (two types of) facilities can co-exist,” he said.

The effort reportedly has the support of the ACLU of Michigan, the National Patients Rights Association and other drug policy reform groups.

Business potential

Irwin says the tax revenue from the plan is “really a tiny piece of the pie” of the total revenue that could be generated for new businesses.

“We’re talking about billions of dollars in sales,” Irwin said.

Figures from the Marijuana Policy Project show Colorado and Washington collected nearly $200 million and $255 million, respectively, from tax revenue off of marijuana sales in 2016. The group also reports that the legal marijuana industry generated $2.4 billion in overall economic activity in Colorado in 2015.

“That’s a lot of ringing of cash registers,” Irwin said of Colorado. “Michigan as a tourism state is positioned to do even better from the economic benefits of going this route. States that have legalized have seen a profound effect on real estate prices, vacancy rates and unemployment.”

Irwin said the goal was to set the excise tax lower than what Colorado started with, although it wouldn’t be the lowest among the eight states that have legalized marijuana. Irwin believes setting taxes too high will encourage the black market to thrive.

Similarly with the various regulations on new businesses, Irwin said the goal is to create a system that doesn’t have too many barriers to entry.

Irwin is anticipating opposition from “prohibitionists” coming into the state and “spending a lot of money” to convince people to vote “no.” He said the pharmaceutical industry also has opposed pot legalization in other states, and could do so here. That’s in addition to youth- and neighborhood-based opposition groups that have already formed, as well as municipalities, including Ottawa County, that have drafted resolutions against the effort.

Business groups undecided

Officials with the Grand Rapids-area and statewide chambers of commerce say they are still studying the initiative language before taking a position. One particular concern comes in the question of whether employers will be able to maintain drug-free workplace policies if voters pass the initiative.

“At this point, we have begun to evaluate the content of the Coalition to Regulate Marijuana Like Alcohol proposal, but we have not yet taken a formal position,” Jim Holcomb, senior vice president and general counsel for the Michigan Chamber of Commerce, said in an email to MiBiz. “As you know, employers have a legal responsibility under various state and federal laws to protect all employees and for that reason we will be analyzing the language in the proposal to determine the impact it would have on the ability of employers to maintain safe and drug-free workplaces.”

Andy Johnston, vice president of government and corporate affairs for the Grand Rapids Area Chamber of Commerce, said the workplace drug policy will be one aspect the group weighs when it considers a formal position later this summer or fall.

The initiative language is drafted to allow employers to maintain a drug-free workplace, if they choose.

“This act does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marihuana,” according to the language. It also “does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person’s violation of a workplace drug policy or because that person was working while under the influence of marihuana.”

Jeff Hank of MILegalize recognized the question is going to be an issue within the business community, which is why the coalition chose to draft the language in that way.

“If we start trying to protect cannabis usage, are we amending other (state) law? You start getting into other legal challenges,” Hank said. “But what do you do when marijuana is legal, your employer tests you and you get fired for it? We’ve got to have that conversation, but we can’t solve it with this initiative.” 

Read 13100 times