Michigan's incoming wholesale cannabis tax is already facing challenges from the state's industry.
The Michigan Cannabis Industry Association (MiCIA), which represents more than 400 producers in the state, said it will appeal the ruling that the Michigan Court of Claims issued last week in Michigan Cannabis Industry Association v. Michigan. That decision declined to block the Michigan Legislature's "unconstitutional" 24% wholesale tax on cannabis, the group said.
“We don’t believe the Court of Claims made the right call,” said Rose Tantraphol, MiCIA spokesperson, in a statement. “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.”
Beginning January 1, 2026, the new wholesale tax will be applied to the first sale or transfer of cannabis from a wholesaler to a retailer; cannabis cultivated and processed for retail sale by a cannabis retailer itself; and sales or transfers of cannabis from medical cannabis provisioning centers to retailers.
MiCIA said its lawsuit will seek to strike the tax in its entirety and detail how the last-minute, late-night process that led to the news law occurred in violation of constitutional provisions.
"The vehicle used for the law was what is commonly referred to as a 'shell bill,' and the Legislature unconstitutionally changed the purpose of that bill before passage and did not meet the three-quarters majority required to amend the terms of the Michigan Regulation and Taxation of Marihuana Act (MRTMA) as an initiated law," the group wrote in a news release.
