Higher Love Cannabis, a Michigan retail chain, said it's closing more than half of its dispensaries.
The company said the decision suspend operations at five of its nine Upper Peninsula dispensaries is driven primarily by the mounting tax burden on Michigan’s adult-use cannabis industry.
"Michigan’s new 24% tax on certain wholesale marijuana sales and transfers, effective January 1, 2026, introduced another substantial cost in a market already subject to a 10% retail excise tax and 6% sales tax," the company said in a press release. "While these taxes apply at different stages of the supply chain and do not constitute a single combined tax rate, their collective impact has created an increasingly unsustainable operating environment - particularly for compliant businesses serving smaller and rural communities."
The closures impact Higher Love's stores in Crystal Falls, Escanaba, Houghton, Munising and Ontonagon. It will continue operations at its locations in Ironwood, Marquette, Menominee and Norway.
"This decision comes amid broader pressure across Michigan’s cannabis industry, where oversupply, price compression and declining revenue have already forced numerous businesses to consolidate, suspend operations facilities and eliminate jobs. The added tax burden has further strained the supply chain and made it increasingly difficult for responsible operators to remain viable. Higher Love joins industry leaders in calling for balanced policies that protect consumers while allowing businesses to retain employees, serve their communities and build a sustainable future," the company said.
Last year, Michigan Governor Gretchen Whitmer signed into law the 24% tax on marijuana sales between producers and dispensaries as part of an effort to fund road repairs.
"When I took office, I made a promise to fix the damn roads so Michiganders could get where they're going faster and safer," she said, according to the Associated Press.
But shortly after, The Michigan Cannabis Industry Association (MiCIA), which represents more than 400 producers in the state, promised to appeal the ruling, calling the new tax "unconstitutional."
“While we are deeply frustrated by this ruling, I can tell you this: The fight is far from over. We remain confident in the strength of our case that this move by the Legislature violated the will of the voters who approved the 2018 citizen ballot initiative. We plan a swift appeal. Our legal team is conducting a thorough review of the decision to determine precisely how we will proceed," said Rose Tantraphol, MiCIA spokesperson, in a statement.
While the tax continues to have negative impacts on Michigan cannabis businesses, the positives haven't piled up as expected.
According to the Detroit News, after the new tax was implemented last year, a nonpartisan fiscal analysis panel said the tax would bring it about $105 million a quarter and $420 million a year. But new numbers from the state's treasury department show that the tax has only brought in $34 million through the end of April.
