Judge Sima Patel of the Michigan Court of Claims issued a decision today denying industry groups’ request to pause Michigan’s new 24% wholesale marijuana tax, clearing the way for it to take effect January 1.
The ruling delivers an early win for Governor Gretchen Whitmer, who initially proposed the tax increase.
Patel ruled that the tax—approved in October as part of the state’s $81 billion budget—is “consistent” with the Michigan Regulation and Taxation of Marihuana Act (MRTMA), the 2018 voter initiative legalizing adult-use marijuana. The Michigan Cannabis Industry Association (MiCIA) and other plaintiffs argue lawmakers needed a three-fourths supermajority to add a marijuana-specific tax to a citizen-initiated statute. Their case centers on MRTMA’s 10% excise tax, which applies “in addition to all other taxes.”
Plaintiffs claim that phrase refers only to broadly applied taxes like Michigan’s 6% sales tax. Patel rejected that view, writing that “the phrase ‘all other’ is broad and expansive,” and does not prevent lawmakers from adding new marijuana-specific taxes.
Patel also signaled the legal fight is far from over. While she denied the preliminary injunction, she found “questions of fact” about whether the 24% wholesale tax undermines MRTMA’s purpose of steering consumers away from the illicit market. She partially denied the state’s request for summary disposition, meaning the core issue will likely be resolved at trial.
The court scheduled a January 13 conference to move the case forward, though Patel noted both sides are likely to appeal her ruling. For now, the tax will take effect as planned unless an appellate court intervenes.
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