A new Michigan tax on cannabis that will go into effect next month is already impacting Upper Peninsula dispensaries.
Higher Love Cannabis Co. has locations from Marquette to Menominee. But this week, the business announced permanent layoffs for 61 of its 213 employees across its nine locations. It says the cuts were necessary to withstand the state’s new wholesale tax set for Jan. 1.
Higher Love Cannabis Co. President Joni Moore says the decision was heartbreaking.
“Even a store that employs eight people in a small community, there’s a huge impact when we have to lay off half of those people,” Moore said. “As everyone knows, we don’t have the industries here in the Upper Peninsula that we used to that employed people, such as copper mining.”
The new 24% wholesale tax on cannabis sales was included in the 2026 state budget passed in October. Combined with the existing 10% excise tax and 6% sales tax, cannabis dispensaries will see a 40% state tax on operations in total.
The legislative bill states that the additional tax revenue will be used to improve state roads. According to the legislation, $3 million will be deposited into the Comprehensive Road Funding Fund and the Neighborhood Road Fund for the current fiscal year. Next year and from then on, $500,000 will be deposited.
However, Moore says lawmakers are overestimating how much the cannabis industry will bring in. She says that with the 40% state tax and 27% federally, every dollar spent on cannabis is taxed 67%, which isn’t sustainable in this market.
Read more at Upper Peninsula Source
