72 (Rev. 01-11)
STATE OF MICHIGAN
RICK SNYDER DEPARTMENT OF TREASURY ANDY DILLON
GOVERNOR LANSING STATE TREASURER
April 4, 2011
James Campbell, CPA
NUMBERS Professional Accounting Services
300 East Fourth Street
Royal Oak, Michigan 48067
Dear Mr. Campbell:
Re: Tax Revenue and the Michigan Medical Marihuana Act
The State Treasurer has asked me to respond to your recent inquiry regarding generating tax
revenue under the Medical Marihuana Act (MMA).
In general, the sale or use of marihuana is taxable because it does not qualify for a prescription
drug exemption under the Michigan Constitution,' the General Sales Tax Act 2 or the Use Tax
Act. 3 However, under the MMA, a caregiver's compensation for costs associated with assisting
a patient in the medical use of marihuana does not constitute a sale of a controlled substance.4
The MMA re-characterizes what might otherwise be a taxable sale of tangible personal property
as a non-taxable caregiver service.
Some states, such as Colorado, Rhode Island, New Jersey, California and Maine, have stateregulated
retail stores or dispensaries. States that have dispensaries use them as an enforcement
mechanism to directly monitor sales. In most of these states, the dispensaries are also required to
be non-profit organizations with the usual reporting obligations to the state agency charged with
oversight of corporations. In these states, the medical marihuana laws narrowly proscribe the
types of persons that can engage in medical marihuana transactions and provide various agencies
with either direct or indirect avenues for oversight.
The MMA does not authorize either a regulatory or enforcement role for the Department of
Treasury. Further, the MMA is administered solely by the Michigan Department of Community
Health which is prohibited from releasing patient or caregiver information from the registry. The
MMA does not provide for state-regulated retail stores or dispensaries. Finally, as noted above,
the MMA specifically states that the transaction between a caregiver and a patient is not a sale of
the medical marihuana.
430 WEST ALLEGAN STREET • LANSING, MICHIGAN 48922
www.michigan.gov/treasury • (517) 373-3200
