Representatives of Michigan’s cannabis industry plan to appeal a Michigan Court of Claims decision to leave in place a pending 24% wholesale tax on cannabis.
The Michigan Cannabis Industry Association filed a lawsuit less than 24 hours after Michigan Gov. Gretchen Whitmer signed the pending tax into law.
“We don’t believe the Court of Claims made the right call,” said Rose Tantraphol, spokesperson for the Michigan Cannabis Industry Association. “While we are deeply frustrated by this ruling, I can tell you this: The fight is far from over.”
The new tax, set to take effect on New Year’s Day, is part of Michigan’s fiscal year 2026 state budget, which passed in October. The wholesale tax of 24% on marijuana sales as growers and processors ship to distributors is meant to help fund road repairs, generating an estimated $420 million in new revenue toward an annual $1.8 billion road budget.
The association, which represents more than 400 cannabis producers across the state, hoped to strike the tax in its entirety.
Business owners in the cannabis industry fear the tax could result in job losses and other issues.
“It’s going to change how many employees we have. It’s going to change our prices and at the same time, in this city, it’s going to change the industry wholeheartedly,” said Al Williams, president of the Detroit Cannabis Industry Association. “I know that they’re trying to use this bill to create tax funding for roads, and more, but when you have a shrinking industry, it’s hard to continue to tax people to build these roads.”
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