Michigan Gov. Gretchen Whitmer has recently challenged the state’s newly approved tax on the sale or transfer of wholesale marijuana. On October 7th, she signed an $81 billion Mi Road Ahead Plan, funded via a new 24% wholesale tax, which will be levied on cannabis transferred from manufacturers to retailers. Effective Jan. 1, 2026, this is in addition to the state’s 10% cannabis excise tax at retail and 6% sales tax.
The Michigan Cannabis Industry Association, MiCIA, quickly took to the courts and requested the government to acknowledge the new tax law as “invalid and unenforceable.” MiCIA alleges that the steps leading up to its enactment violate several sections of the Michigan Constitution, and that it misses requirements to amend the law responsible for the legalization of marijuana in the state of Michigan.
Gov. Whitmer publicly responded regarding the tax, urging Michigan lawmakers to “fix the damn roads” and prioritize state funds instead. This tax is Whitmer’s key component of a bipartisan budget deal designed to fund road repairs across the state.
As of October 2025, there are 58 cannabis dispensaries across Lansing — 30 of which are located in East Lansing. Michigan’s cannabis industry, which has been known for consistent oversupply and low prices, has seen a steady increase of recreational and medical users within the past couple of years.
To the relief of some, this new tax exempts any registered medical marijuana patients in the state of Michigan. But to others, this new tax has created competition between businesses, raising concerns for residents, and causing a local dispensary to close their doors this fall.
Pure Options, a marijuana dispensary with multiple locations across Michigan, expects to see lower customer turnout along with the price jump. Delaney Muncy, a budtender at the Frandor location, has many concerns as an employee in the cannabis industry.
“Taxes are definitely weeding out the mom and pop shops like Pincanna,” Muncy said. “Bigger companies will probably start to get rid of distillate [low quality] products and promote higher quality ones— it’s harder to sell normally cheap products at an inflated price”.
Higher cannabis taxes often drive consumers to unregulated sources and unsafe recreational use — made apparent by the state of California’s current marijuana industry. In recent years, the illicit cannabis market in California has been bigger than the legal recreational market, mainly due to cheaper prices and a lack of tax. Many expect the illegal market in Michigan to increase and mirror California’s with this bill.
“People are going to consume the same amount of weed regardless,” Muncy says, emphasizing the importance of purchasing weed from a legal dispensary. “It’s concerning to see more people buy cheaper street marijuana that isn’t regulated or tested.”
While there is still no sign of a potential drop in Michigan cannabis prices, the fate of the new wholesale tax and the Michigan cannabis industry will remain in the courts.
