Hundreds of people were at the Michigan Capitol Tuesday morning to protest a proposed new tax on marijuana that’s become part of state leaders’ last-ditch effort to avoid a government shutdown that had been scheduled to begin at midnight, before legislators agreed to extend the deadline another week.
Inside the Capitol, demonstrators chanted, “Save our jobs,” while outside, people carried signs with messages like, “Don’t tax my peace.”
In 2018, Michigan voters approved a ballot initiative to legalize recreational marijuana and to impose a 10% excise tax on retail sales. Now, seven years later, lawmakers are considering adding a 24 percent tax on wholesale marijuana — before it’s sold to customers at stores — to create a stream of new revenue to invest in road improvements. Both Democratic Gov. Gretchen Whitmer, who first floated the marijuana tax hike, and Republican House Speaker Matt Hall of Richland Township have prioritized investments in infrastructure this year.
The new tax is expected to generate approximately $420 million in additional annual revenue for the state, according to the nonpartisan House Fiscal Agency.
But opponents, like George Lynch of Niles, said the plan would kill the industry and ultimately diminish the revenue flowing into state coffers.
“The money is coming in and supporting the state,” Lynch said. “Now, they’re literally going to turn around and damage the industry. And they’re going to lose money instead of gaining money. They’re not going to get any more money out of this.”
More: New Michigan wholesale pot tax would ‘decimate’ businesses, industry says
Last year, Michigan’s recreational marijuana retail sales came in at about $3.2 billion, according to monthly reports from the Cannabis Regulatory Agency.
Lynch, who owns a marijuana shop named Green Stem in Niles, said organizers of Tuesday’s protest were expecting as many as 2,000 people to be at the Capitol on the final day of Michigan’s current fiscal year.
For months, lawmakers in the GOP-led House and Democratic-controlled Senate have been struggling to reach a compromise on the new state budget as lawmakers seek additional dollars for roads while Republicans in the House also look to institute spending cuts for departments. On Tuesday afternoon, Whitmer told state employees there was a budget agreement with the House and Senate in place and that a shutdown would be averted.
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