Michigan lawmakers have approved a major new tax on state cannabis operations to help repair local roadways that have seen better days. It passed narrowly in the Senate on Oct. 3, 19-17.
Beginning next year, a 24 per cent wholesale tax will be implemented on adult-use/recreational marijuana sales in the state. The levy will be placed on top of a a pre-existing 10 per cent excise tax and 6 per cent sales tax.
Many people are outraged, to say the least. They were already upset before it received Senate approval on Friday. A large cohort of workers in the industry were protesting in front of the State Capitol Building in Lansing on Oct. 1.
“Save our jobs! Save our jobs!” they exclaimed while picketing out on the lawn. Michigan’s industry has created well over 44,000 job positions, many of which are now at risk.
The tax comes as part of the state’s newly approved US$82.5-billion-dollar budget. State regulators aim to use it to raise US$420.7 million for fixing Michigan roads and bridges.
Governor Gretchen Whitmer still needs to sign the bill. She voiced her enthusiasm for repairing Michigan’s streets in a news release on Friday.
“I ran for office in large part because I wanted to fix the damn roads,” she said. “With this budget, we’re locking in a significant, bipartisan investment to fix state and local roads for decades to come.”
Despite the appealing prospect of better road transportation statewide, fear that the move will trigger a resurgence in illicit market sales is currently in the air.
“This is truly a great day for illegal drug dealers and criminal gangs in Michigan,” said Senator Jeff Irwin on the Senate floor.
On October 3rd, 2025, the Michigan Legislature voted to add a new wholesale tax on cannabis.
Michigan leads the nation in per-capita cannabis sales because it’s affordable and accessible here. This new tax threatens that: it will push people away from licensed shops, raise… pic.twitter.com/CSfnSMDgnx
— DogHouse Farms – Michigan (@DogHouse_MI) October 5, 2025
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Many feel that only the industry big dogs will have any chance of keeping on next year. Green Thumb Industries Inc (CNSX: GTII) (OTCMKTS: GTBIF) (FRA: R9U2), Cresco Labs Inc (CNSX: CL) (OTCMKTS: CRLBF) (FRA: 6CQ) and Verano Holdings Corp (OTCMKTS: VRNOF) (FRA: 76U0) are currently leading in Michigan.
Meanwhile, others say the industry as a whole is bound to die out within a short period of time.
“It is neither hyperbolic nor unrealistic to say that the wholesale tax on marijuana businesses in House Bill 4951 will cause the extinction of the Michigan licensed cannabis industry,” said Detroit lawyer, Denise Pollicella, in a letter to the editor of the Detroit Free Press.
“It will be swift,” she added, “so swift, in fact, that no licensed operators will be left to tax, and the taxes projected to be collected by the creation of this bill will never materialize.”
In terms of size, Michigan’s cannabis market is second only to California — a state that recently chose to curb a major tax increase. Whether Michigan will be able to retain that position after prices rise in the new year remains to be seen.
The state has been renowned for having among the cheapest marijuana nationwide, but it appears that those days are numbered.
The Michigan Cannabis Industry Association, a leading trade organization in the sector, is currently considering filing a lawsuit over the immense tax boost.
These Michigan senators voted in favor of a 24% wholesale tax on cannabis, while the excise tax on liquor has been at 4% for decades. This will raise prices for consumers, results in layoffs of workers, and devastate mom and pop businesses. pic.twitter.com/X445bhDpsK
— Steve Neavling (@MCmuckraker) October 3, 2025
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