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At 3:00 a.m. on October 3, 2025, Michigan's Legislature passed a 24% wholesale tax on legal marijuana sales, without hearing a single second of testimony and just eight days after the bill's language was made public (the tax is the subject of multiple other posts here on the Cannabis Law Blog). Unless blocked by the courts or repealed, the tax will take effect on January 1, 2026.
Litigation is inevitable, and we're also hearing talk of efforts to find an alternative replacement tax, as well as talk of possible recalls to find replacement legislators. In light of that, here are some relevant numbers we've heard in talks with cannabis advocates (and verified):
- In November of 2018, voters for the first time elected Gretchen
Whitmer Governor, Senate Majority Leader Winnie Brinks to the State
Senate, and Speaker Matt Hall to the State House of
Representatives. That same election, Michigan voters passed the
Michigan Regulation and Taxation of Marihuana Act
("MRTMA"), 56% to 44%. Since then:
- Michigan employment, 12/31/2018: 4,752,000
- Michigan employment, 12/31/2024: 4,802,000
- Michigan's net job gain, 2018-2024: 50,000
- Direct cannabis industry employment, August 2025: 39,575 (employees of licensed businesses only)State subsidies and support for cannabis industry participants: $0
- State subsidies for other businesses via Michigan Economic Development Corporation: $995 million (does not include $387 million in tax breaks, or infrastructure upgrades; 13,079 jobs created)
- State spending on Strategic Operating and Attraction Reserve: $889 million (zero jobs created)
- FY 2024 tax revenues from MRTMA:
- Marijuana excise taxes under MRTMA: $314,960,000
- Excise taxes dedicated to roads funding: $116,000,000
- Sales tax on adult use cannabis sales: $188,976,000
- State's "estimate" for annual wholesale tax revenue: $420,000,000
- Estimated number of signatures required for recall petitions
(amount required is based on in-district votes for governor in
2022, numbers below reflect votes for Senator or Representative and
are therefore slightly lower than the actual threshold):
- State Senator: average of 28,497 (lowest 15,905; highest 35,666)
- State Representative: average of 9,795 (lowest 4,141; highest 13,948)
Our takeaways from these numbers? (1) There is not a lot of respect for what the cannabis industry has contributed to Michigan's economy. (2) Whoever is doing the State's revenue projections is high when it comes to estimating wholesale tax revenue, but believes that taxes from the industry will end up more than double the State's receipts under MRTMA. (3) We have had extensive experience with recalls in Michigan, and in our view the chances that a recall attempt will be successful are extremely slim.
Clearly, this is only the beginning of the cannabis tax debacle in Michigan. Stay tuned to the Cannabis Law Blog for further updates.
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