Michigan Cannabis Industry Association Files Lawsuit Over New 24% Marijuana Excise Tax

The group, which represents roughly 400 licensed businesses across the state, argues that the tax is unconstitutional and threatens the survival of Michigan’s legal marijuana industry. Filed in the state Court of Claims, the complaint names the State of Michigan, the Department of Treasury, and State Treasurer Rachael Eubanks as defendants. The lawsuit contends that the newly enacted Comprehensive Road Funding Tax Act (CRFTA), which imposes the 24% wholesale tax on marijuana sales, violates multiple provisions of the Michigan Constitution. MiCIA asserts that because the 2018 voter-approved Michigan Regulation and Taxation of Marihuana Act (MRTMA) established the framework for marijuana excise taxes, any new excise tax requires either voter approval or a three-fourths supermajority in the legislature. Instead, lawmakers passed the measure by a simple majority and sent it to the governor’s desk.

The association also alleges that the bill was rushed through the legislature without public hearings and that it unlawfully alters MRTMA by reference. Further, it argues that the law’s definition of “wholesale price” disregards existing contractual agreements such as bulk purchase discounts, creating a conflict with current business practices and impairing contracts already in place. The Michigan Cannabis Industry Association (MiCIA) warns that if the tax is implemented on January 1, 2026, as scheduled, many businesses could face insolvency, resulting in job losses and a weaker regulated market.

The lawsuit seeks declaratory and injunctive relief to block enforcement of the tax. It argues that the law undermines the constitutional safeguards meant to protect voter-initiated statutes from legislative overreach. MiCIA is asking the court to declare the new excise tax unconstitutional and prevent the state from collecting it.

The filing highlights a rapidly escalating clash between state officials and Michigan’s marijuana industry. While Governor Whitmer and legislative leaders say the higher tax is necessary to fund road improvements, industry leaders argue that layering a 24% wholesale excise tax on top of the existing 10% excise tax and 6% sales tax will stifle the legal market, drive up consumer prices, and hand more ground to the illicit market.

The outcome of the case could have sweeping implications, not only for Michigan’s cannabis businesses but also for the balance of power between voter-approved laws and legislative action in the state.