Michigan Explores Tax Exemptions for Tribal Land-Based Marijuana Sales

The House Committee on Regulatory Reform has successfully forwarded Senate Bill 180 to the full House of Representatives without any changes. Previously, in June, the Senate had greenlit the proposal with a 29 to 9 majority.

Introduced by Republican Senator Roger Hauck, supported by six Democrat co-sponsors, the bill seeks to permit the Cannabis Regulatory Agency (CRA) to collaborate with an Indian tribe regarding marijuana-related businesses. A notable highlight of this legislation is that tribal marijuana business sales within Indian lands will not be subject to the State's customary 10% marijuana excise tax.

Should the House approve the proposal, it will next proceed to Governor Gretchen Whitmer's desk for evaluation.

It's essential to note that while Michigan legalized marijuana in 2018 via Proposal 18-1, the regulation did not address tribal land-based businesses. Senate Bill 180 aims to amend this oversight within the Michigan Regulation and Taxation of Marihuana Act (MRTMA). Key provisions include:

• Empowering the CRA to collaborate with an Indian tribe on marijuana businesses, provided certain conditions are met.
• Prohibiting the CRA from employing individuals with financial interests in tribal marijuana ventures.
• Asserting that tribal marijuana business sales on Indian lands will not be subjected to the State's 10% excise tax.

For a more comprehensive look into the proposal, you can access the full text of Senate Bill 180 here.

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Senate Bill 180 Overview

The proposed legislation aims to refine the "Michigan Regulation and Taxation of Marihuana Act" of 2018 by making amendments to various sections. The essence of the bill revolves around:

• Establishing what constitutes "Cannabis regulatory agency."
• Defining terms like "Cultivate," "Indian lands," "Indian tribe," and "Industrial hemp."
• Outlining the responsibilities of the cannabis regulatory agency, including rule promulgation, issuing licenses, and ensuring marihuana establishment compliance.
• Setting forth rules for licensing, security measures, advertising restrictions, and more.
• Detailing the rights and non-penalizing actions for marihuana growers, processors, transporters, retailers, and microbusinesses.
• Proposing an excise tax of 10% on marihuana sales, with specific exemptions for tribal marihuana businesses and medical marihuana sales.

The bill's enactment is contingent upon the passage of Senate Bill No. 179 of the 102nd Legislature.

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