Michigan implements major marijuana wholesale tax hike on January 1 – WTVB

COLDWATER, MI (WTVB) – Michigan’s cannabis industry is set for a significant shake-up as a new 24% wholesale excise tax on adult-use marijuana transactions takes effect when we ring in the new year on Thursday.
The new tax, part of the Comprehensive Road Funding Tax Act signed into law by Governor Gretchen Whitmer back in October, is a key component of the state’s plan to generate an estimated $420 million annually for road and infrastructure repairs.
This levy is applied when cannabis is sold from a cultivator or processor to a retailer, and it is in addition to the existing 10% retail excise tax and 6% state sales tax, making Michigan’s overall marijuana tax burden among the highest in the nation.
The new tax faces strong opposition and ongoing legal challenges from industry groups, including the Michigan Cannabis Industry Association (MiCIA), which argues the measure unconstitutionally alters a voter-approved initiative that deliberately kept taxes low to combat the black market.
Despite these arguments, a Michigan Court of Claims judge recently declined to block the tax from going into effect, allowing the implementation to proceed as planned. Industry experts and business owners predict the increase will inevitably lead to higher consumer prices and a potential decline in sales, driving some customers back to the illicit market.
Products already in retail inventory before January 1, 2026, are not subject to the new tax, so pricing impacts are expected to appear gradually as new stock enters stores.
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