Michigan Court Upholds New Cannabis Wholesale Tax

A Michigan State Court of Claims judge has ruled that the state’s new cannabis tax provisions can proceed despite legal challenges raised by the industry, WWMT reports.

Lawmakers approved the new 24% wholesale cannabis tax in October with the governor’s support. The Michigan Cannabis Industry Association (MICIA) later filed a lawsuit challenging the provision, which is set to take effect on January 1. The plaintiffs argued that the tax violates the state’s voter-approved cannabis legalization law because the 2018 policy — which calls for a 10% excise tax on retail sales — can only be modified by voters or a supermajority vote by lawmakers. Meanwhile, state attorneys argued that the wholesale cannabis tax is distinct from the voter-approved legalization policy and not a violation of the state’s Constitution.

In his Tuesday ruling, Court of Claims Judge Sima Patel rejected the plaintiffs’ motions for a preliminary injunction, which would have prevented the policy from taking effect.

“We don’t believe the court of claims made the right call. While we’re deeply frustrated by this ruling, I can tell you this: the fight is far from over.” — MICIA Spokesperson Rose Tantraphol,via WWMT

Lawmakers approved the wholesale cannabis tax to fund road construction and repairs in the state.

Treasury officials said they are preparing to begin collecting the tax starting next month, the report said.