Michigan Court Hears Marijuana Industry Lawsuit Challenging New Tax Increase
Roads, Revenues, and a 24% Tab: Michigan’s High-Stakes Cannabis Tax Showdown
Michigan marijuana tax increase. That’s the headline and the hangover. In Detroit’s Court of Claims, the air felt less like a weed lounge and more like a road crew’s break room—cold coffee, hot rhetoric, and a bitter argument over who pays for the asphalt. Michigan’s new 24 percent tax on all cannabis products, passed in the fiscal year 2026 budget, is slated to kick in on January 1, 2026. The state says it’s about infrastructure. The industry says it’s a crowbar to the ribs of a market just learning to walk without wobbling. At the center of it all: the Michigan Cannabis Industry Association, alleging the tax violates the 2018 legalization framework, and a judge weighing what constitutes lawful “cannabis taxation” versus a political shakedown. This is where “marijuana policy reform” collides with “legal cannabis revenue,” and the Michigan cannabis market braces for the hit.
What Voters Passed, What Lawmakers Added
In 2018, Michigan voters embraced the Michigan Regulation and Taxation of Marihuana Act (MRTMA), which set a 10 percent excise tax on recreational sales. The association argues the Legislature can’t casually rewrite that deal. Their lawsuit says the 24 percent levy, tucked into the 2025 Comprehensive Road Funding Tax Act and passed by a simple majority, effectively changes the voter-approved law without the supermajority required to amend it. They’re not whispering, either. They’re asking for an injunction to keep this thing on ice before it melts small businesses into the illicit market. If you want to read through the bones of it, the lawsuit docket is public via the Michigan courts. For cultural context—and a reminder that the legal map is still a minefield—see how power in Washington keeps flexing the federal stick even as states push forward: GOP-Controlled Senate Committee Warns DC That Marijuana Is Federally Illegal, With ‘Enhanced Penalties’ For Sales Near Schools.
“We’re here in court fighting to protect the will of Michigan voters,” the association’s spokesperson said after the hearing, arguing that the wholesale tax crosses the line voters drew in 2018.
The State’s Pitch: Wholesale Isn’t Retail, and Potholes Don’t Fill Themselves
The Michigan Department of Attorney General, representing the Legislature, counters that the new 24 percent charge is a wholesale excise tax, not a retail add-on—and therefore it doesn’t amend MRTMA’s 10 percent retail excise. Point to the statutory text, they say: the 10 percent rate applies at retail, and it was always “in addition to all other taxes.” This, they argue, is one of those “other taxes.” Meanwhile, budgeteers insist the revenue is mission-critical. The roads don’t pave themselves, and Whitmer’s final full year demands concrete. The political reality: this budget squeaked through in the pre-dawn hours after a months-long slugfest. The policy reality: when lawmakers need money, they often look to cannabis. If you need a sense of how the courts might reshape the national board, keep your eye on the high bench: Supreme Court Schedules Closed-Door Meeting To Discuss Marijuana Companies’ Case Seeking To Overturn Federal Prohibition.
- New tax: 24% wholesale excise on all cannabis products, effective Jan. 1, 2026.
- Original framework: MRTMA’s 10% retail excise remains on the books.
- State’s stance: wholesale tax doesn’t amend the voter-approved retail tax.
- Revenue target: road repairs and new construction statewide.
- Politics: budget passed by thin margins after a drawn-out fight.
Out on the street, the calculus gets grittier. Operators say a 24 percent wholesale tax will hit smaller retailers hardest, compounding razor-thin margins in a market already racing to the bottom. The fear is simple: when legal prices spike, the illicit market taps the keg and invites everyone over. Consumers don’t read tax code; they read price tags. And when the difference is big enough, they pick convenience and cash savings every time. That’s the behavioral story behind headlines about shifting habits, like how holiday rituals have started to lean green. See the culture bleeding into policy and wallets in one seasonal snapshot: As More Americans Choose Marijuana Over Alcohol, Mainstream Media Notices The ‘Cousin Walk’ Thanksgiving Tradition. Culture changes faster than statutes, and markets faster than budgets. The risk is a policy that looks good in a spreadsheet but bleeds out on Main Street.
Michigan’s fight is also a mirror held up to the national cannabis economy. States court legal cannabis revenue when times get tight, then act surprised when overtaxation crimps the legal supply chain. Meanwhile, legalization continues to march, stutter, and improvise. Consider Florida’s looming ballot showdown and how a massive, newly legal market could reshape regional commerce, tax models, and consumer behavior across the map: Florida Marijuana Campaign Is ‘Confident’ Legalization Measure Will Make Ballot, With 1 Million Signatures Despite State Roadblocks. Back in Michigan, the Court of Claims now holds a question with pothole-deep implications: Is this a clean wholesale tax for roads, or a backdoor rewrite of voter intent? Either way, the clock is ticking toward 2026. If you care where policy meets product—and you prefer your flower to come from a legal, transparent market—finish the journey by exploring our curated lineup here: https://thcaorder.com/shop/.
