News Summary
The Michigan Cannabis Industry Association (MCIA) has filed a lawsuit challenging a newly enacted 24% wholesale marijuana tax. Arguing it violates the Michigan Constitution, the MCIA claims the tax was improperly passed and seeks a court ruling to declare it invalid. With a projected revenue of $420 million for road repairs, the tax has faced criticism for potentially harming the cannabis industry amid low prices. The legal battle emphasizes the ongoing complexities of cannabis legislation in Michigan.
Lansing, Michigan – The Michigan Cannabis Industry Association (MCIA) has filed a lawsuit against the state of Michigan in response to a newly enacted 24% wholesale tax on marijuana. This legal action comes just after Governor Gretchen Whitmer signed the controversial legislation into law as part of an $81 billion state budget on Tuesday, October 7, 2025.
The MCIA argues that this new tax violates multiple sections of the Michigan Constitution. Specifically, they cite the requirement that any amendments to the voter-approved Michigan Regulation and Taxation of Marihuana Act (MRTMA) must gain approval either through a three-fourths vote in the Legislature or via a vote by the public.
Voter-approved Proposal 1 in 2018 had previously legalized recreational marijuana use for anyone 21 years and older, and it established a 10% excise tax on commercial marijuana sales. The newly instated wholesale tax was passed by the Michigan House with a significant majority vote of 78-21 and narrowly through the Senate with a 19-17 tally. However, the MCIA contends that the legislation failed to secure the necessary three-fourths approval from the Legislature, rendering the law invalid.
The lawsuit also claims that the original bill had a misleading title and underwent an unlawful shift in purpose. Originally intended to create a fund for road repairs without imposing new taxes, the bill changed to apply a new tax on marijuana wholesale prices. The MCIA is calling for a declaratory judgment to declare the new tax law invalid and unenforceable, as well as seeking injunctive relief to block the state from enforcing the measure while the case is under consideration.
Projected revenue from the newly implemented wholesale tax is estimated to be approximately $420 million, which is earmarked for local road repairs as part of a larger $2 billion road funding initiative. The MCIA has raised concerns that the tax structure would bypass existing contractual agreements between marijuana growers and retailers. By not accounting for discounts and rebates, businesses would be liable to pay additional taxes based on a calculated indexed rate.
Furthermore, the lawsuit argues that the Legislature improperly amended the road funding bill during the legislative process, infringing upon a constitutional clause that prohibits significant alterations to a bill’s intent. The new tax is scheduled to come into effect on January 1, 2026, and there are apprehensions regarding its potential negative impact on Michigan’s cannabis industry, which is already contending with low retail prices and market oversaturation.
If the tax is implemented as planned, Michigan’s overall tax burden on recreational marijuana would rank among the highest in the country. This increase could adversely affect consumer prices and the viability of the cannabis sector within the state.
Despite the lawsuit, both Governor Whitmer and House Speaker Matt Hall have defended the legality of the newly enacted tax. They maintain that the measure does not alter the existing 10% excise tax and thus only required a simple majority to be enacted.
As this legal battle unfolds, it highlights the complexities and challenges surrounding cannabis legislation in Michigan, a state that has been pivotal in the movement towards the legalization of recreational marijuana.
Deeper Dive: News & Info About This Topic
- AP News: Michigan Marijuana Tax
- Wikipedia: Michigan Regulation and Taxation of Marihuana Act
- Detroit Free Press: Michigan Cannabis Association Lawsuit
- Cannabis Business Times: Michigan Governor Signs Cannabis Tax
- Google Search: Michigan marijuana tax lawsuit
Author: STAFF HERE DETROITMI WRITER
DETROIT STAFF WRITER The DETROIT STAFF WRITER represents the experienced team at HEREDetroitMI.com, your go-to source for actionable local news and information in Detroit, Wayne County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Movement Electronic Music Festival, Detroit Grand Prix, and America's Thanksgiving Parade. Our coverage extends to key organizations like the Detroit Regional Chamber and Focus HOPE, plus leading businesses in automotive and healthcare that power the local economy such as General Motors, Ford Motor Company, and Henry Ford Health. As part of the broader HERE network, including HEREGrandRapids.com, HERENorthville.com, HERENovi.com, and HEREPlymouth.com, we provide comprehensive, credible insights into Michigan's dynamic landscape.