Michigan cannabis businesses and customers are grappling with a new 24% wholesale tax on marijuana that took effect January 1, raising concerns about the industry's sustainability and potential return to black market sales.
- Michigan's new 24% cannabis wholesale tax took effect January 1, raising concerns about higher retail prices
- Dispensary owners fear the tax will drive customers back to the black market and force business closures
- Tax revenue of $420 million will fund road repairs, though some doubt it will actually fix roads
The tax, which applies to the wholesale price of marijuana, is expected to create a ripple effect that could ultimately increase retail prices for consumers. Aaron, a regular cannabis customer for years, believes the tax will hurt the marijuana industry.
"The marijuana field is definitely going to suffer from this tax," Aaron said.
Aaron worries the tax could lead to quality issues as more people attempt to grow their own cannabis.
"What I'm afraid might happen is that everybody will think they're a grower, and they'll start growing, and that the quality will go down," Aaron said.
Joe Cranmore, who has owned Five Point Farms dispensary since 2024 with his wife and brother, says business had been sustainable in recent months before the new tax took effect.
"We're to the point now where it's been sustainable the last couple of months," Cranmore said.
However, Cranmore fears the new tax will create a chain reaction that increases costs for retailers and ultimately raises prices for consumers.
"With the new tax coming, obviously everyone in this industry is a little concerned about how that's going to affect their bottom line, and whether they'll be able to keep their doors open," Cranmore said.
The anticipation of the tax has already impacted local retailers, according to Cranmore.
"Adding a new 24% wholesale tax is gonna really put a crunch on some of these businesses. Some of which have already closed down in anticipation of the upcoming tax," Cranmore said.
When asked about the potential impact on customers, Cranmore expressed concern about a return to illegal sales.
"I think it's going to push them back to the black market," Cranmore said.
Nearly all revenue from the tax will go toward the Neighborhood Roads Fund, part of Michigan's "Fix the Damn Roads" initiative. The state estimates the tax could generate $420 million in revenue.
However, Cranmore remains skeptical about whether the funds will actually improve road conditions.
"I've lived here my entire life. I feel like the roads are in worse shape now than they ever have been. After all of these steps to get the funds to fix them," Cranmore said.
Despite concerns about the tax's impact, Aaron says he wants to see accountability in how the revenue is used.
"As long as there's accountability and they fix the roads, and they do what they say," Aaron said.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
You can also see the latest news from across our mid-Michigan neighborhoods by liking us on Facebook or following us on X.
