LANSING, mi — A Michigan judge has cleared the way for a controversial 24% tax on marijuana to begin in 2026, rejecting the cannabis industry's legal challenge to block the new levy.
Court of Claims Judge Sima Patel denied a request for an injunction from the Michigan Cannabis Industry Association, which had argued the tax violated the state constitution. The ruling allows the wholesale excise tax to proceed as scheduled at the start of 2026.
"The Court finds insupportable plaintiffs' argument in 25-160 that the Michigan Regulation and Taxation of Marihuana Act (MRTMA) is the sole method by which to tax regulated marijuana in Michigan and that the 24% wholesale excise tax could only be enacted through an amendment to the MRTMA passed by a supermajority," Patel wrote in her decision.
The Michigan Cannabis Industry Association filed the lawsuit challenging the tax, presenting their case to Patel last month. The organization argued lawmakers violated constitutional provisions when they passed the legislation.
"Michigan voters made their voices heard in 2018 when they passed a citizen ballot initiative legalizing cannabis," MiCIA Spokeswoman Rose Tantraphol said in a November press release. "When the state Legislature passed this law imposing a 24% wholesale tax on cannabis, it did so in violation of provisions in the state's constitution. Lawmakers used a trojan horse process during chaotic, middle-of-the-night actions to ram this legislation through. We're fighting to protect the will of Michigan voters."
The Michigan legislature passed the tax law earlier this year as part of Gov. Gretchen Whitmer's road funding initiative. The revenue generated will partially fund the governor's infrastructure improvement plans.
"When I took office, I made a promise to fix the damn roads so Michiganders could get where they're going faster and safer," Whitmer said in a video after signing the bill in October.
The new tax will apply to marijuana sales from growers and processors to retailers. Industry experts predict the additional levy will drive up consumer prices and reduce sales volume.
Adam Hoffer, director of excise tax policy at the Tax Foundation, said the new tax will almost certainly lead to an increase in retail prices and a decrease in sales. The Michigan Senate Fiscal Agency predicted a 14.4% sales decline.
Consumers will face multiple taxes on marijuana purchases. In addition to the new 24% wholesale tax, shoppers must pay a 10% retail excise tax that has been in place since legalization in 2018, plus a 6% sales tax.
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