Whitmer’s Proposed Budget Includes Cannabis Regulatory Agency

Governor Gretchen Whitmer revealed a $79 billion budget proposal on Wednesday focused on investments in education, infrastructure, the environment and economic development. Among the proposals, Whitmer included $33.8 million for the Cannabis Regulatory Agency (“CRA”) “to regulate the state’s cannabis and hemp industries to ensure compliance with consumer health, safety, and welfare regulations.”

Of the total outlay, $4.4 million in funding would go to the creation of a state-operated testing laboratory. Referred to in the budget recommendation as a “reference laboratory,” CRA Director Brian Hanna explained that the testing lab would audit the results from existing safety compliance facilities for accuracy, help investigate illicit product in the market, and determine recalls and standardized testing methods for the industry. Director Hanna estimated the cost to initially build and equip the laboratory to be approximately $2.8 million with ongoing costs of $1.6 million for staffing.

Governor Whitmer also announced that the state will distribute excise taxes in the amount of $240 million from adult-use sales, of which $83.6 million is earmarked for both the School Aid Fund for K-12 education and for road and bridge repair and maintenance. Additionally, participating counties and municipalities are expected to receive a total $71.7 million in revenue. According to CRA records, there were 569 active retailer licenses and 12 active microbusiness licenses as of the end of the 2022 fiscal year. That would mean that counties and municipalities can expect to receive approximately $62,000 for each such license within their borders. By comparison, based upon excise tax collections during the previous fiscal year, $56,400 was paid out for each retail and microbusiness license.

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