Michigan Governor Proposes Additional 32% Tax on Adult-Use Cannabis

Name: Full Spectrum CBD Flower - 7 grams - Organic Hemp
Brand: Surgeons
Price: 39.99 USD
Availability: InStock

Feb 11, 2025 Surgeons LLC

Introduction

Michigan's cannabis industry is at a crossroads as Governor Gretchen Whitmer proposes a massive 32% additional tax on adult-use cannabis sales. The controversial proposal is part of a $3 billion infrastructure plan, aimed at improving the state's roads, bridges, and transportation systems. However, this decision has sent shockwaves through the cannabis community, with stakeholders debating whether this tax will strengthen Michigan’s economy or crush the booming cannabis market.

While some applaud the plan as a necessary financial strategy, critics argue that this move will drive consumers back to the illicit market, harm small businesses, and set a dangerous precedent for other states. Could this cripple the legal industry Michigan has worked so hard to build? Or is this just another cash grab from politicians looking to capitalize on cannabis revenues?

Let’s break it all down.

The Case for the 32% Cannabis Tax

Governor Whitmer’s administration justifies the tax increase as a means to tackle Michigan’s long-standing infrastructure issues. The plan suggests that the billions generated from legal cannabis sales can provide a sustainable revenue stream to repair roads, expand public transportation, and address other state-funded projects.

Key reasons for the tax proposal include:

✔ Infrastructure Improvement – Michigan’s roads and bridges have long been in a state of disrepair. The additional tax is expected to generate millions to fix these issues.

✔ State Revenue Boost – A higher cannabis tax would significantly contribute to Michigan’s economy, helping fund public education, law enforcement, and public health initiatives.

✔ Aligning with National Trends – Other states have experimented with higher cannabis taxes to increase state funds, with mixed results. Supporters believe Michigan can learn from past mistakes and refine the system.

✔ Restricting Overconsumption – Some lawmakers claim that a higher tax will deter excessive use, keeping cannabis out of the hands of minors and maintaining a regulated market.

While these justifications might make fiscal sense, they ignore one harsh reality—over-taxation kills industries, and the cannabis sector is no exception.

Why This Tax Could Cripple Michigan’s Cannabis Market

Industry leaders, business owners, and consumers strongly oppose the proposed tax hike, warning that it could undo years of progress in cannabis legalization. Here’s why they’re pushing back:

❌ Consumers Will Flock Back to the Illicit Market – One of the main goals of legalization was to eliminate black market sales, ensuring safer products and tax revenue for the state. A 32% increase could push cannabis prices too high, forcing consumers back to underground dealers where products are untested, untaxed, and unregulated.

❌ Michigan’s Cannabis Businesses Will Suffer – Small dispensaries and local cultivators already struggle with overhead costs, compliance fees, and competition from multi-state operators (MSOs). Adding another tax burden could force many to shut down, leaving corporate giants in control of the market.

❌ Tourism and Cross-Border Sales Will Decline – Michigan’s cannabis-friendly policies have made it a popular destination for out-of-state customers, especially from prohibition states like Indiana and Wisconsin. A significant price increase could drive those consumers elsewhere, impacting tourism revenue.

❌ Economic Disparities Will Worsen – A steep tax increase disproportionately affects lower-income consumers, limiting their access to legal and safe cannabis. Medical patients, who already face restrictions and affordability issues, could suffer the most.

Comparing Michigan’s Cannabis Tax to Other States

Michigan’s current excise tax on adult-use cannabis is 10%, with an additional 6% sales tax, making it one of the more affordable states for cannabis. However, adding another 32% would bring the total tax to a staggering 48%, making Michigan one of the most expensive states for legal cannabis.

Here’s how Michigan would compare to other states if this tax passes:

🔸 California: 15% excise tax + local sales taxes (varies by county)
🔸 Illinois: 10-25% tax, depending on THC levels
🔸 Oregon: 17% state tax + up to 3% local tax
🔸 Colorado: 15% excise tax + 15% retail sales tax
🔸 Washington: 37% state excise tax

If Michigan surpasses 48% taxation, it will become one of the most heavily taxed cannabis states in the U.S., raising concerns that this will drive the market underground rather than boost the economy.

How Can Michigan’s Cannabis Industry Fight Back?

Cannabis advocates and business leaders aren’t staying silent about this tax proposal. Here’s how industry professionals and consumers can push back against the excessive tax hike:

💥 Petitions & Advocacy: Industry groups like NORML and the Michigan Cannabis Industry Association (MCIA) are rallying against the tax. Contact your local representatives and sign petitions to stop the increase.

💥 Consumer Boycotts & Awareness: Educating consumers about how this tax could hurt their access to safe, affordable cannabis is crucial. Sharing information on social media can create public pressure against the proposal.

💥 Legal Challenges: Some experts believe that such a high tax rate could be challenged legally, especially if it disproportionately affects small businesses and marginalized communities.

💥 Public Hearings & Political Action: Attending state hearings, challenging lawmakers, and making pro-cannabis voices heard can make a difference. This isn’t just about tax—it’s about the future of Michigan’s cannabis industry.

Conclusion

Michigan’s proposed 32% cannabis tax increase is one of the most controversial moves in the industry to date. While the governor’s administration argues that this tax is necessary for infrastructure and state revenue, opponents fear it will cripple small businesses, push consumers to the illicit market, and damage the legal industry beyond repair.

The future of Michigan’s cannabis market hangs in the balance. Will the state prioritize consumer access, small businesses, and industry growth? Or will greedy taxation policies force Michigan’s cannabis industry into the shadows once again?

The fight isn’t over yet, but one thing is clear—this proposal will spark fierce debate in the coming months.

📢 What do you think about Michigan’s proposed cannabis tax? Share your thoughts in the comments below!