LANSING, Mich. (News 10) – Michigan’s 24% wholesale tax on marijuana generated tens of millions less than expected in its first four months, according to a new report from the Michigan Treasury Department.
The tax took effect Jan. 1 and was projected to generate $420 million a year to pay for road and infrastructure improvements. A state treasury report shows the new tax brought in only about $34 million in the first four months of 2026, $70 million less than the $105 million expected.
Cannabis rights advocate Jamie Lowell said he is not surprised by the data, as the tax has hurt an already struggling industry.
“It’s stopped growth. It’s stopped some places from even opening up in the first place. And it’s led to many places having to shut down,” Lowell said.
He said the constant regulation around the cannabis industry feels like a step backwards.
“There’s an attack on what’s been achieved over the years with cannabis,” Lowell said. “In spite of the achievements made with the law and how we’re supposed to be viewing cannabis now and stuff like that… it seems to want to regress to law enforcement being more assertive and making more arrests, even for small-time cannabis activity, charging harsh felonies for this.”
Logan Braid, manager at The Cake Shop, said he feels the tax was a waste, since it didn’t do what was intended.
“We heard a lot from customers and from the public about how they didn’t really appreciate being saddled with the burden of the new taxes. And then to hear that it’s coming up short and not even generating the revenue that they told us, is pretty disappointing.”
He said he hopes this data will make lawmakers re-evaluate the effectiveness of the tax.
“We just hope they realize that the cannabis industry isn’t just a cash cow that you can milk to fix all of Michigan’s problems,” Braid said.
Lansing City Clerk Chris Swope said the shortfall could affect local revenue sharing.
“We get over a million dollars a year in that revenue sharing. So, if it’s cut, 10 or 20%, that could have an impact on our city budget,” Swope. “Police, fire, roads are the three big ones that people really care about continuing the service of. And, you know, any deficit that the city would have could kind of hit anywhere.”
State Rep. Gina Johnsen, R-Eaton County, said the shortfall should not affect roadways because the gap will be filled by the general fund.
“Roads is funded through a different manner now. We always are working to make municipalities and schools whole, and secure funding route,” Johnsen said.
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