On Tuesday night, Wisconsin Gov. Tony Evers released his 2021-23 biennial budget, which, as expected, included language about medical and adult use cannabis legalization.
While Evers did not mention cannabis during his budget address on Tuesday, Evers did talk about legalization earlier this month when he gave a broad overview of his forthcoming budget.
“Legalizing and taxing marijuana in Wisconsin—just like we do already with alcohol—ensures a controlled market and safe product are available for both recreational and medicinal users and can open the door for countless opportunities for us to reinvest in our communities and create a more equitable state,” Gov. Evers said in a statement. “Frankly, red and blue states across the country have moved forward with legalization and there is no reason Wisconsin should be left behind when we know it’s supported by a majority of Wisconsinites.”
The budget proposes that the Department of Revenue issue cannabis retail licenses, and the Department of Agriculture, Trade and Consumer Protection would license quality control labs. Those using cannabis for medical purposes would not have to pay “retail level excise and sales taxes.”
Specifically, there would be a 15% excise tax on wholesale cannabis sales from producers (growers) to processors. At the retail level, there would be a 10% excise tax. These taxes, the budget estimates, would “generate $165.8 million in new tax revenue annually starting in fiscal year 2022-23.”
Of that revenue, 60% would go “into a newly created Community Reinvestment Fund.” So, in FY 2022-23, that is estimated to be $79.3 million. “The Governor proposes to devote a substantial portion of the excise revenue generated by the legalization of recreational marijuana to improve social equity and help underserved communities,” the budget in brief reads.
So, in FY 2022-23, that would include the following allocations: $10 million for “grants to promote diversity and advance equity and inclusion;” $10 million for “community health worker grants;” $10 million for “equity action plan grants;” $5 million to “assist underserved communities;” and $34,852,800 to “provide school sparsity aid.” (The budget also notes that another $5 million from the fund would “promote entrepreneurship in underserved communities,” though it’s unclear if that’s a part of one of these allocations or something separate.)
While Evers has been steadfast, there remains the reality that the legislature does not share his enthusiasm for cannabis legalization. Still, the budget proposal is a conversation starter, and it remains to be seen to what extent lawmakers might be willing to engage.