Hazel Park’s municipal retirees can thank taxes generated by the city’s 10 cannabis retailers for funding their pensions.

Early this week, the state announced the city would receive $582,286 in state excise taxes for marijuana sales, the highest of 14 Oakland County communities that license 50 cannabis retailers.

And while Ed Klobucher, Hazel Park’s city manager for the past 23 years, is grateful for the financial boost, “It is a fractional amount of our budget.”

Dedicating the annual cannabis money to the retirement fund was an easy decision, he said.

“We got a huge increase from the Municipal Employees’ Retirement System of Michigan … over $1 million,” he said. “What we’ve done is allocate the cannabis money to help us pay for that. It’s the one bill that has to be paid — it’s constitutionally protected. If we didn’t make those payments, MERS would sue us and the judgment would be levied against every taxpayer in the city.”

Without the annual cannabis tax check to pay that bill, he said, the city would have to cut expenses in noticeable ways, like parks and road maintenance.

“We cash that check and we’re grateful for the revenue, but it’s not transformational,” he said. Paying the rest of the $1 million bill, he said, takes frugality, creativity and a little luck

“We’ve had some new construction where the old racetrack was,” he said. “We’ve sold some vacant lots and have new housing, which isn’t bad in a fully built-out city. … We’ve done pretty well.”

However, signs of oversaturation of cannabis businesses are starting to show. A key indicator: This year’s check to Hazel Park is $8,577 less than last year’s check. Lower prices and fewer sales means less tax collected and distributed to communities with cannabis retailers.

Statewide, $100 million is being distributed this year among 302 local governments as part of Michigan’s marijuana tax law (108 cities, 36 villages, 80 townships, 74 counties and four tribes) that benefit.

The fund will also pay more than $116 million to the School Aid Fund for K-12 education and $116 million to the Michigan Transportation Fund.

The 2024 fiscal year payouts amount to just over $58,200 for every licensed cannabis retail store and microbusiness located within its jurisdiction.

Oakland County will receive more than $2.9 million for its share of the marijuana tax pie.

There are no restrictions as to how communities can spend the money, but in many cases it’s a fraction of an overall municipal budget.

Waterford Township will receive a $232,914 excise tax check from its four cannabis retailers. The money will go into the general fund and the township board of trustees will decide how to spend it, said Supervisor Anthony Bartolotta.

The township has two additional cannabis licenses that have not been granted, he said.

Ferndale officials expect $349,372 from its six licensed shops. That’s an estimated 1.3% of the general fund, said James Krizan, the interim city manager.

The money will go into the city’s general fund, which supports “most government services, including police, fire, elections, and administrative services,” he said.

Krizan said no new programs or initiatives will be funded by the cannabis payment, but it “does help to somewhat offset some cost increases the city experiences year over year.”

He said the money is not enough to make up for rising costs Ferndale and other cities face.

“The revenue sharing from marijuana establishments is for sure helpful, but it is a little like a Band-Aid on the wound that is the municipal finance system in Michigan,” he said.

Ferndale officials have no plans to add licenses, he said.

Madison Heights’ $174,686 check will also supplement the city’s general fund but is used specifically to enhance the city’s public safety and parks system, said City Manager Melissa Marsh, because each directly benefits residents. Park improvements are all related to facility upgrades, she said, including new park features like upgraded play structures.

Madison Heights’ city council has approved two more cannabis applicants; the city now has five licencees.

In Southfield, the $116,457 check will be added to the general fund and used “for everything from police overtime to road repairs,” said Mayor Ken Siver.

For the first time, Oxford Township will receive a revenue-sharing check for $174,785 from its three shops, which opened last year, said Supervisor Jack Curtis.

Township trustees now must decide how to spend the money, but the general feeling, he said, is that the money should help improve public safety.

He’d like to see the fire department benefit with first-responder training.

“These funds could offset millage money to provide assets or training leaving the millage money to do what we told the voters we would use the millage money for,” he said.

The township’s rules for the shops required renovating an existing dilapidated vacant building or a new building on long-vacant land, he said. The township’s licensing agreement included a community benefit clause. That clause allowed the township to sell unused fire-department land and to get donations from the shops. The $200,000 gained by the township is funding an early-EMT training program — a partnership between the fire department and Oxford Community Schools — to prepare students to attend a fire academy.

Curtis said there are no plans to license any new marijuana shops.

“The market is constricted by supply and demand,” he said “Neighboring communities, even the Village of Oxford, are oversaturated, causing dispensary opportunities to disappear.”

Any community considering allowing marijuana shops should diligently address all community benefits and shop location regulations because “you only get one chance,” Curtis said.

Licensed marijuana shops have operated with few issues, according to officials who responded to The Oakland Press for this story.

“Not one police call. They keep the places very clean and we get tax revenue off them,” Bartolotta said.

Ferndale’s Krizan said the businesses have been generally good to work with and few have been the target of criminals.

Marsh said Madison Heights has had an “overwhelmingly positive” experience because the professional companies “are responsible and all participate in community events. We have little to no police occurrences related to these facilities.”

Southfield has experienced no problems with the two licensed shops, Siver said.

Madison Heights police enforcement and residents’ complaints are “more focused on the independent caregiver providers,” Marsh said. Those operations “are not regulated the same manner as these retail facilities and do not provide the same monetary benefit or community engagement to our city.”

Siver said illegal operations and those that are unregulated and unlicensed by the city, such as caregiving operations “have been a problem.”

Southfield officials have lobbied state lawmakers to increase the penalties for operations involved in illegally growing marijuana, Siver said.

Here are Oakland County’s 14 communities with licensed cannabis businesses and their portion of the revenue-sharing checks:

• $582,286: Hazel Park, 10 shops. The city received $590,863 in 2024.

• $349,771: Village of Oxford, six shops (two more than in 2023). The village received $236,345 in 2024.

• $349,372: Ferndale, six shops. The city received $354,518 last year.

• $291,143: Berkley, five shops, up by three. The city received $118,172 in 2024.

• $232,914: Waterford Township, four shops, two unassigned licenses. The township received $177,259 in 2024 from three shops.

• $174,785: Oxford Township, three shops and a first-time payment.

• $174,685 (3-way tie): Madison Heights, Royal Oak and Walled Lake. Three shops each. Walled Lake received $177,259 in 2024. Royal Oak and Madison Heights each added a shop since 2023.

• $116,457 (2-way tie): Pleasant Ridge and Southfield. Two shops each. Southfield received $118,172 in 2024. Pleasant Ridge received $59,086 in 2024 but has since added on shop.

• $58,228 (3-way tie): Holly, Lake Orion and Orion Township; one shop each. Last year’s check: 59,086.

Visit go to michigan.gov/revenuesharing or michigan.gov/cra to learn more about the state’s marijuana industry and the annual payments.