Michigan’s cannabis industry has filed a lawsuit to block a new 24% wholesale tax, claiming it’s unconstitutional and threatens the state’s legal market.
The Michigan Cannabis Industry Association filed the suit in the Court of Claims. They argue the tax, which took effect January 1st, acts as an illegal “tax on a tax.” Because the 24% fee is added before the state’s 6% sales tax is calculated.
Opponents say it pushes total taxes past legal limits.
While the state plans to use the new money for road repairs, some say it will hurt existing revenue.
Currently, communities receive a share of a separate 10% excise tax.
Hillsdale County, along with Jefferson Township, the Village of Camden, and the City of Reading, was slated to receive a combined total of more than $800,000 in 2025 excise tax revenue.
Opponents of the wholesale tax warn that higher prices will likely drive customers to buy from illegal sellers.
17th District State Senator Jonathan Lindsey is among those who oppose the new tax. He introduced legislation to kill the wholesale tax back in February.
Senate Bill 810 currently sits in the Senate Committee on Government Operations. Its future is in doubt, as the legislation would require the support of Democrats who helped implement the tax that the bill aims to kill.