Michigan Marijuana Industry Association Appeals Court Ruling on 24% Wholesale Tax
The Michigan Cannabis Industry Association has appealed a court ruling that upheld the implementation of a 24% wholesale tax on marijuana sales, set to take effect on January 1. The association is urging the Michigan Court of Appeals to take up the case immediately, citing concerns that the tax violates the will of the voters who approved the 2018 ballot initiative legalizing recreational marijuana.
The tax, which is expected to generate $420 million annually, is part of a plan to increase revenue for road funding. However, the association argues that the tax should have required a supermajority vote from lawmakers, as it amends a ballot proposal that voters approved in 2018.
A lower court judge rejected an effort to block the tax, citing that the ballot proposal recognized “other taxes” and that the new wholesale tax appears to be consistent with the language. However, the judge noted that there are still questions regarding whether the excise tax interferes with the intent of the 2018 ballot proposal.
The association is urging the Court of Appeals to act quickly, citing the potential harm to the marijuana market and the state’s economy if the tax is implemented. Already, some marijuana businesses have begun to lay off employees, and customers may turn to the black market, the association warns.
Recreational marijuana retail sales in Michigan totaled $3.2 billion last year, according to data from the Cannabis Regulatory Agency. The stakes are high, and the association is determined to fight for the will of the voters who approved the 2018 ballot initiative.
