Michigan is at the center of a heated debate as lawmakers consider a new 24% tax on wholesale marijuana. If approved, Michigan would have the second-highest cannabis tax rate in the nation, behind only Washington. Advocates, business owners, and cannabis workers gathered at the State Capitol to express their concerns, warning that a 24% tax would devastate an already fragile industry.
What the 24% Tax Means for Michigan’s Cannabis Market
The new 24% tax would come in addition to Michigan’s existing 10% excise tax and 6% sales tax that customers already pay at dispensaries. According to the House Fiscal Agency, the 24% tax could generate more than $420 million annually, with revenue earmarked for state infrastructure projects like roads. However, opponents argue that the 24% tax will come at the expense of small businesses, workers, and consumers.
Fears of Job Losses and Black Market Growth
Cannabis workers and dispensary owners told lawmakers that the 24% tax would drive up retail prices, forcing many customers to turn to the black market for cheaper, unregulated products. Critics stressed that this shift would undermine public safety by increasing the circulation of untested cannabis. One advocate explained that consumers “are not going to be able to afford to buy from a retailer that’s been tested and trusted. The 24% tax is going to send everybody back to the street, which will un-regulate everything and create more crime.”
Impact on Small Cannabis Businesses
Smaller operators say the 24% tax would crush their ability to compete. Unlike larger, multi-state operators, small dispensaries and local growers don’t have the financial cushion to absorb the added cost. Many predict widespread closures if the 24% tax passes.
Lawmakers Defend the 24% Tax
Supporters of the measure argue that the 24% tax is necessary to raise revenue for critical infrastructure improvements. With roads and bridges in need of repair, lawmakers see cannabis as a reliable source of funding. They claim the industry is strong enough to withstand the new rate, pointing to the billions in legal sales since legalization.
Final Thoughts
As the Senate prepares to vote, Michigan’s cannabis community remains on edge. The 24% tax could reshape the state’s marijuana market, either by creating a stronger revenue stream for public projects or by crippling small businesses and fueling black market activity. For now, all eyes are on Lansing as lawmakers decide whether the 24% tax will become a reality.
