Michigan governor floats extra 32% adult-use cannabis tax

Michigan’s governor is suggesting taxing adult-use cannabis an additional 32% to fund a $3 billion infrastructure plan.The plan floated by Democratic Gov.

Gretchen Whitmer would need to win approval from state lawmakers to become reality, according to the Bridge Michigan nonprofit news outlet. ADVERTISEMENT But marijuana industry observers fear that an extra 32% wholesale tax – on top of existing excise and sales taxes – would harm the state’s $3.3 billion industry at a crucial time.

Recreational marijuana sales in Michigan are currently subject to a 10% excise tax and a 6% sales tax.Last year, the state reported collecting $270 million in marijuana taxes from $3.06 billion in sales recorded in 2023.

Of that, $87 million in tax revenue went directly to municipalities.Whitmer – who was elected partially on a promise to “fix the damn roads,” according to the Bridge – is proposing a total of $3 billion in new revenue to fund spending on infrastructure.

A 32% wholesale tax on adult-use cannabis would be in line with similar taxes on tobacco and could raise as much as $470 million annually, according to Crain’s Detroit Business.But it also would wallop marijuana producers already struggling with historically low prices, Crain’s reported.

Producers and retailers alike in other legacy states, such as California, blame high taxes for the continued existence of an illicit market. ADVERTISEMENT “This proposal is a stretch that will have massive pushback from all regulated operators who have invested hundreds of millions of dollars into the state,” Aric Klar, CEO of cultivation company Quality Roots, told Crain’s.

A 32% tax would raise the average price of an ounce at retail more than $22, to $91.34, according to Crain’s....