Michigan Attorneys Argue Cannabis Wholesale Tax Is Distinct from Retail Tax, Thus Constitutional

Attorneys for the state of Michigan are arguing in court that the law raising the wholesale tax on cannabis to 24% is constitutional because it is distinct from the retail tax included in the voter-approved adult-use law and, therefore, does not need the three-fourths supermajority required to amend voter-initiated statutes, Michigan Public reports.  

“Rather, the Legislature enacted a law that works in concert with the legal framework for regulating marijuana, which exists in several separate, but intertwined, laws.” — The state, in a brief, via Michigan Public 

The brief was filed in the state’s Court of Claims in a lawsuit filed by the Michigan Cannabis Industry Association that contends the tax violates the state constitution’s contracts clause. In their lawsuit, the trade association argues that lawmakers “jammed” the bill through the legislature “without a single committee hearing to discuss the substance of the bill” by disguising its provisions behind an original title that only mentioned creating a fund for road infrastructure and revenue replacement – not establishing a new tax.  

The state contends that the primary purpose of the wholesale tax is to raise revenue for roads and not to regulate the cannabis industry. 

A hearing on the lawsuit is expected later this month.