Marijuana industry leaders and local officials are pushing back against Michigan Governor Gretchen Whitmer’s proposal to implement a 32% wholesale tax on marijuana transactions, warning it could devastate an already strained market.
The proposal is part of Whitmer’s “MI Road Ahead” infrastructure plan and is projected to generate nearly $470 million annually for roads and bridges. But critics say it would push small and mid-sized operators out of the legal market.
“You’re going to kill the industry,” said cannabis attorney Denise Pollicella of Omnus Law during a hearing held Thursday by the House Licensing and Regulatory Affairs and Insurance and Financial Services Subcommittee. “They just can’t take it. They’re already financially burdened enough.”
In 2024, Michigan brought in $331 million from its 10% marijuana excise tax, not including the state’s 6% sales tax. Marijuana sales that year reached nearly $3.3 billion, with $232 million of the excise tax revenue distributed to schools, roads, and local governments.
But industry insiders say those numbers don’t reflect current realities. Retail marijuana prices hit a record low in April, with the average ounce selling for $62.23. The number of licensed retailers has dropped for two consecutive months, falling to 853 in April.
“This isn’t a Cheech and Chong movie,” said Bangor Township Supervisor Glenn Rowley, whose community received $760,000 in marijuana tax revenue last year. “These are business professionals. Now is not the time to impose new taxes or fees on them.”
Rowley warned that aggressive taxation could force businesses to shut down or drive consumers back to the black market.
“You keep strangling them, and they’re going to go back to the black market,” he said.
Tyler Wejrowski, CEO of Wojo, a grow and processing company in Pinconning, said the proposed tax would benefit large, vertically integrated operators that can route products through their own supply chains to reduce tax exposure.
“If I’m vertically integrated, I’m charging myself a penny to send it to my store,” he said. “And then I’m avoiding that 32% tax.”
Currently, Michigan’s 10% marijuana excise tax is among the lowest in the nation. By contrast, Washington levies a 37% tax, and Illinois imposes up to 25% plus a 7% wholesale tax. That’s made Michigan a destination for out-of-state shoppers, particularly in the Upper Peninsula and near the Indiana and Ohio borders.
Rowley acknowledged the need for road funding but urged lawmakers to look elsewhere.
“You’re already getting your fair share out of marijuana businesses,” he said. “Do we need to pay for roads and find funding—absolutely. But not like this.”
