What to know about Minnesota’s new pot law
Minnesota Gov. Tim Walz signed a recreational marijuana bill into law Tuesday, making the possession and sale of cannabis legal and further surrounding Wisconsin in a cloud of legal pot smoke.
Prior to Minnesota’s new law, 50% of Wisconsinites older than 21 already had fairly easy access to the drug, living within a 75-minute drive to a recreational marijuana dispensary in another state.
But this bill opens up access for Wisconsin residents even more, giving the western side of the state a quick drive to future recreational marijuana dispensaries. And with medical and recreational marijuana legislation stalled here, Wisconsin residents are supplying surrounding states with millions in sale tax dollars and contributing to out-of-state local businesses.
Here is what to know about legal marijuana sales and the prospects for that happening in Wisconsin.
Minnesota becomes 23rd state to legalize recreational marijuana
With the passage of the recreational marijuana bill, people in Minnesota who are at least 21 years old will be able to possess, use and grow plants for personal consumption as of Aug. 1.
The bill sets up provisions for recreational dispensaries to open; however, Minnesota legislators estimate it will be a year or so before the regulatory structure is set up for commercial sales to begin, but when they do, there will be a 10% tax on cannabis products on top of existing sales taxes.
Legalization will allow the possession of no more than 2 pounds of consumable marijuana flower in their private residence. Adults would be allowed to grow up to eight cannabis plants at home, but no more than four could be mature and flowering at a time.
Meanwhile, adults will be able to buy up to 2 ounces of cannabis flower, 8 grams of concentrate and 800 milligrams worth of edible products at a time, and possess those amounts while in public.
However, bringing or consuming that marijuana across state lines into Wisconsin is illegal.
Medical and recreational marijuana isn’t on the horizon for the Dairy State
Wisconsin is in the minority of states nationwide that have not legalized marijuana use in some form. It is one of 13 states with no form of legal marijuana and is nearly landlocked by states with legal cannabis.
Michigan, Illinois and now Minnesota allow the sale, purchase and consumption of medical and recreational marijuana, with medical use legal in Iowa.
Despite Democratic Gov. Tony Evers’ numerous proposals to legalize recreational marijuana in his state budgets, legalization has not been popular among Republican lawmakers controlling the Legislature.
Republican leaders have stated they would not support a pathway for recreational weed but signaled they were coming closer to creating a medical marijuana program for Wisconsin aimed at treating chronic pain.
Republicans voted in April to kill Evers’ proposal to legalize marijuana, among other proposals, just as they did with Evers’ past two budgets and said they would do again this year.
This move is despite poll after poll shows a majority of Wisconsinites are in support of legalization.
A recent Marquette Law School poll found 64% of registered voters said marijuana should be legal, with 30% opposed to legalization. That support is highest among Democrats, with 82% supporting it, and lowest among Republicans, 43% of whom say it should be legal.
Legalized cannabis in Wisconsin could bring in millions in tax dollars and small business revenue
Some Wisconsin residents are traveling across state lines to buy legal marijuana, potentially costing the state millions of dollars in tax revenue that instead goes toward neighboring states.
Illinois collected $36 million in tax revenue from Wisconsin residents purchasing marijuana in 2022, according to an analysis from Illinois’ nonpartisan Legislative Fiscal Bureau.
“That’s taxes that are going to their roads, their schools, their mental health support, their AODA support,” state Sen. Melissa Agard, D-Madison, told USA TODAY NETWORK-Wisconsin during her Grass Routes Tour stop in Green Bay on April 28. “We’re the ones missing out.”
The marijuana sales to out-of-state residents in Wisconsin counties along Illinois’ border accounted for about 8% of the $462 million in tax revenue Illinois officials received in 2022 from sales of cannabis products, according to data from the Illinois Department of Financial and Professional Regulation.
“We know state lines aren’t stopping Wisconsinites from participating in the industry,” Agard said during her press conference.
William Nething, president of THE Dispensary, a hemp-derived cannabis dispensary, said that as Wisconsinites travel out of state for pot purchases, “we’re losing money that could be spent within our state to our small business owners and staying in our communities,” Nething told the USA TODAY NETWORK-Wisconsin.
Wisconsin isn’t only losing out on potential revenue, but Nething said the state’s prohibition is also putting residents at risk as they illegally bring marijuana into Wisconsin borders.
Legal marijuana could generate $165 million for Wisconsin’s budget
Under Evers’ marijuana proposal, his office estimated cannabis sales would generate $165.8 million in revenue for the state in its first year. His proposal would have levied a 15% excise tax on wholesale marijuana sales and a 10% excise tax on retail sales under the plan.
In addition, the existing sales tax would be charged for retail sales that Evers wanted to use to fund schools, mental health and substance use disorder services, according to the governor’s office.
That estimated revenue mimics how much neighboring states are generating from their marijuana sales.
Since legalizing recreational marijuana in 2020, Illinois has experienced fast-growing sales of adult-use cannabis. Recreational sales reached $1.5 billion in the 2022 fiscal year, according to data from the Illinois Department of Revenue.
Michigan brought in $198 million in tax revenue from medical and recreational sales in 2022, according to the state’s Cannabis Regulatory Agency.
Michigan and Illinois are using that tax revenue to fund public schools and give back to communities affected by marijuana criminalization, similar to Evers’ plan.
Under the Michigan Regulation and Taxation of Marihuana Act, 35% of excise revenue goes toward the state’s school aid fund for K-12 education and another 35% goes toward the state’s transportation fund. The remaining revenue is given back to the municipalities and counties where dispensaries are doing business.
In Illinois, 25% of tax revenue generated from cannabis sales must support communities that are economically distressed, experience high rates of violence and have been disproportionately impacted by drug criminalization.
That money goes through Illinois’ Restore, Reinvest, and Renew Program, which gives eligible communities the cannabis revenue, in part, based on their rates of gun injuries, child poverty, unemployment and incarceration.