Michigan’s Cannabis Industry Faces Uncertainty Amid New 24% Wholesale Tax
As the state’s cannabis industry continues to grow, local retailers and manufacturers are bracing for the impact of a new 24% wholesale tax on marijuana. The tax, which was signed into law by Governor Gretchen Whitmer as part of the state’s $81 billion budget, has sparked concerns among business owners who fear it could lead to a decline in sales and a loss of jobs.
For Detroit-based cannabis business owners Majed Hamadeh and Ali Mazloum, the past 48 hours have been particularly challenging. Hamadeh, co-owner of Ultra Cannabis, and Mazloum, a wholesaler who supplies products to dozens of retailers across the metro area, are worried about the potential consequences of the tax.
“This community has fought hard to get to where we are, and we’re not going to let this tax drive us out of business,” said Hamadeh. “We’ll do everything we can to weather the storm, but it’s going to be tough.”
Mazloum echoed Hamadeh’s concerns, noting that the tax could have far-reaching consequences for the state’s economy. “The revenue generated from this tax will be used to fund important state programs, such as road maintenance and education,” he said. “If the tax is passed down to consumers, it could lead to a decline in sales and a loss of jobs in the industry.”
Data shows that Michigan’s legal cannabis market is expected to generate nearly $3 billion in revenue this year, with Wayne County accounting for over $31 million in sales in August alone. However, if the wholesale tax is implemented, it could lead to a significant decline in sales and revenue for businesses like Hamadeh’s and Mazloum’s.
Despite the challenges ahead, both business owners remain committed to their industry and are determined to find ways to adapt to the new tax. “We want to keep our employees and continue to provide high-quality products to our customers,” said Mazloum. “We’re willing to do whatever it takes to make it work.”
The new tax is set to take effect on January 1, 2026, and it remains to be seen how the industry will respond. One thing is certain, however: the cannabis industry in Michigan is facing a significant challenge, and it will be up to business owners like Hamadeh and Mazloum to find ways to adapt and thrive in the face of uncertainty.
