Missing millions: Indiana falls behind as neighboring states rake in revenue from legal pot

BUCHANAN, Mich. (WISH) — The recreational marijuana industries in Michigan and Illinois are booming. Michigan reported tax revenue of $325 million in 2022. Illinois reported $445 million.

I-Team 8 reporter Kody Fisher drove the Indiana-Michigan border to find out how much Hoosiers are contributing to those numbers.

Seven and a half miles from the Indiana border sits the small town of Buchanan, Michigan.

“Seventeen years ago, you could shoot a cannon down the middle of the street and you wouldn’t hit anyone. It was like the land that time forgot. There were 24 empty storefronts,” antique shop owner Alan Robandt said.

Now, in 2023, thanks to the marijuana industry, Robandt said that’s all changed.

“I have lots more people coming and spending money because it’s almost kind of a ‘canna-tourism’ where they come in, they’ll go across the street to the coffee house, the Italian sweets shop, they’ll go to the other antique stores. So, it’s definitely a destination shopping crowd.”

That shopping crowd is spending a lot of money. I-Team 8 witnessed one transaction where the customer bought $145.76 worth of legal marijuana products.

Some piles of that green, cold hard cash, are coming from Indiana.

“We do have a substantial amount of guests that come from Indiana primarily seeking wellness medical benefits we provide here,” Rick Paniagua, owner of Canavist Wellness, said.

Paniagua tells I-Team 8 that customers from Indiana are coming to his store seeking a different option to pharmaceutical drugs to treat an array of different conditions.

“Whether it’s severe depression, mild depression, PTSD, anxiety, problems sleeping, problems with appetite,” Paniagua said.

During one transaction, I-Team 8 overheard customers asking for products that would help with pain relief.

“We do tell them that it is federally prohibited to transport cannabis across state lines and that they should consume it while they’re here in the state of Michigan. However, if there’s some leftover, you know, transport it outside the vision,” Paniagua said.

In investigating this story, I-Team 8 found that retail sales tax is only a portion of the economic impact cannabis can have on a state. Industrial-sized grows also play a major role.

Fello Cannabis in Galien, Michigan, spent $9 million to build its grow facility. It produces 800 pounds of marijuana a month, providing a living for dozens of people.

“Fifty-five full-time employees, ranging from front-line employees making $15, $16, $17 dollars an hour, plus benefits, to managers making 6 figures,” Fello Cannabis President and CEO Matt Sulkowski said.

Fello Cannabis is owned by an Indiana family.

Sulkowski says they want to bring that many jobs to the economy in Indiana.

“We would love to move our headquarters down to Indiana. It’s where I live. It’s where my family lives. We’d love to open up shop down there once it’s legalized and bring this beautiful market to the state of Indiana,” Sulkowskis said.

I-Team 8’s Kody Fisher took what he found in Michigan to the statehouse in Indianapolis.

“On this issue in particular, we’ve stuck our head in the sand,” said State Rep. Kyle Miller (D-District 82), who supports legalizing marijuana in the state.

“We’re looking at a potential windfall that could fund our cities, our education system. All these things that we need to be making investments in. I think that there are plenty of Hoosiers that are currently enjoying cannabis, albeit illegally. To get all those people above board, paying taxes on that, would be a mighty windfall for Indiana.”

I-Team 8 asked Republican State Sen. Aaron Freeman, who represents District 32, about the potential economic impact.

For Freeman, the argument over recreational marijuana boils down to one thing.

“The Federal Government has said this is, federally, a Schedule I drug and it’s illegal,” Freeman said.

If the federal government makes marijuana legal, Freeman said, “Let’s see if we get there. Let’s see if that happens and when that happens we are having an entirely different conversation, but for now, we follow the law.”