Elizabeth Nelson's City Council Blog

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I write a City Council newsletter with my summary of agenda items coming before City Council. Sign up to receive it first via email, or read it here later on this blog.

Additional Thoughts (Mar 13, 2021) - Marijuana Excise Tax Funds

The following was originally published in my Mar 13, 2021 Newsletter in the "Additional Thoughts" section.

This week, I cosponsor a resolution to clarify the City’s use of Marijuana Excise Tax funds.

DC-3 (21-0522) Resolution to Commit Marijuana Excise Tax Rebate Funds


These funds reflect a percentage of revenue received by the State, then returned to communities that permit the sale of marijuana for recreational use. Council members Hayner, Ramlawi, and I collaborated on this resolution and worked with staff (the City Administrator and City attorneys) to designate purposes and craft appropriate language. Council Members Radina and Briggs have asked to join as cosponsors.


Much has been written on the topic of our country’s drug laws: how criminalization of marijuana in particular has had a disproportionate (negative) impact on poorer communities and communities of color. Generations of families have suffered long-term consequences due to arrests and convictions that we know targeted certain vulnerable populations more than others.


In 2019, Ann Arbor City Council approved a regulatory framework for the sale of recreational marijuana, consistent with state law. State law governing this industry is appropriately significant and includes many barriers to entry. We have legalized the sale of recreational marijuana in Ann Arbor, but we have not suddenly opened up opportunities for the vulnerable populations previously harmed by its criminalization. I believe we should be intentional in acknowledging this fact. The resolution on this week’s agenda is an effort to start those conversations.


Agenda item DC-3 directs the City Administrator to receive and track revenue from the marijuana excise tax funds and allocate them in this budget (and future budgets) to "restorative and alternative strategies for public safety and community support such as:

  • Emergency Services response that include mental health and substance use disorder professionals;

  • Programs for substance abuse intervention, treatment and recovery support services;

  • Education and enrichment programs for at-risk youth; and

  • Innovation grants toward promoting criminal diversion and expungement, support for formerly incarcerated members of our community, and other criminal justice reform initiatives.”

This year, Ann Arbor will receive $476,023 in marijuana excise tax funds from the state. This money comes with no restrictions as to how it must be spent. In our budgeting process, it is categorized as ‘non-recurring’ because we do not know how much money will come to us in future years. The amount received this year is not enormous, but the resolution asks for collaboration with the County and others for matching funds and partnership.