News Summary

Governor Gretchen Whitmer of Michigan has announced a new 24% tax on wholesale marijuana sales, set to take effect on October 7, 2025. This tax aims to generate approximately $420 million annually for road repairs and infrastructure improvements. While the tax targets transactions from growers to retail dispensaries, concerns have been raised about its potential impact on legalization momentum and a predicted decline in marijuana sales. The legislation has sparked backlash from industry leaders who argue that it threatens the legal cannabis market in Michigan.

Detroit, Michigan – Governor Gretchen Whitmer has enacted a new 24% tax on wholesale marijuana sales effective October 7, 2025, aimed at generating approximately $420 million annually to fund road repairs and infrastructure improvements in the state. This tax is anticipated to play a significant role in Whitmer’s larger $1.8 billion road-funding plan designed to enhance Michigan’s infrastructure.

The tax applies specifically to marijuana sold from growers to retail dispensaries, while consumers will still incur a 10% excise tax and a 6% sales tax on retail marijuana products. Despite the potential revenues, experts predict a 14.4% decline in marijuana sales could result from the tax, with concerns that consumers might turn to the black market for marijuana products instead.

The legislation faced substantial backlash from small business owners and industry leaders who argue that the new tax could threaten the already burgeoning legal cannabis market in Michigan. Industry representatives criticized the move as a lack of public consultation prior to its enactment, describing it as a “slap in the face” to those in the cannabis sector.

Context of Road Funding in Michigan

Michigan’s road quality has been a long-standing issue, as the state ranks 40th nationally for road conditions and 28th for infrastructure funding, according to the Citizens Research Council of Michigan. Previous attempts to improve road funding included a failed proposed 45-cent gas tax increase in 2019 and a $3.5 billion bonding program introduced in 2020, which primarily focused on highways and bridges. However, the borrowing authority granted by the 2020 program expires in 2025 and does not address local roads, escalating the urgency for new funding avenues.

Fiscal Implications

This new tax is part of Michigan’s broader fiscal plan for the 2026 budget, totaling $81 billion. Recently, partisan disagreements led to a last-minute budget deal to prevent a government shutdown after the October 1 deadline was missed. Some discussions surrounding the budget included reallocating existing gas tax revenues, previously designated for educational purposes, towards road funding instead.

Opponents of the tax, including representatives from the Michigan Cannabis Industry Association, have stated that the tax could violate Michigan’s constitutional referendum rules, which require a three-quarters legislative vote to amend laws passed by voters. Additionally, the tax has raised concerns about existing supply agreements between marijuana growers and retailers, as foreseen impacts on sales may deteriorate these essential business relationships.

National Context and Comparisons

If fully implemented, Michigan’s marijuana tax burden could soar to nearly 40%, positioning it as one of the highest in the nation, second only to California. Recent tax hikes on marijuana sales have emerged in several states, including Minnesota, Maryland, and Maine, reflecting a growing trend in higher taxation on cannabis across the United States.

Supporters of the tax, including Senator Ed McBroom, argue that the tax is justified, referencing earlier considerations for taxing methods laid out in the 2018 legalization law for marijuana. The successful passage of the tax measure came amidst a narrow Senate vote of 19-17, showing significant bipartisan dissent and lobbying from cannabis industry advocates aimed at mitigating potential adverse effects.

Conclusion

In light of the state’s road safety and transportation issues, Governor Whitmer has asserted her commitment to improving infrastructure for the residents of Michigan. However, the implications of the new wholesale marijuana tax remain contentious, with serious concerns raised over the potential impacts on the legal cannabis market and the broader economic landscape in the state.

Deeper Dive: News & Info About This Topic

Michigan Implements New 24% Tax on Wholesale Marijuana Sales

STAFF HERE DETROITMI WRITER
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.

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