A Michigan lawmaker has introduced legislation that would eliminate the state’s 24% wholesale tax on recreational marijuana, less than a year after lawmakers approved the levy as part of a broader road funding package.
House Bill 6224, filed by State Representative James DeSana (R), would repeal the Comprehensive Road Funding Tax Act in its entirety. The legislation was introduced July 29 and referred to the House Appropriations Committee, with the bill formally reproduced by the legislature on August 11.
The tax took effect January 1 and applies to the first sale or transfer of adult-use marijuana to a licensed retailer. Growers, processors and other businesses making those transfers are generally responsible for paying the tax. For vertically integrated or related businesses, the state calculates the tax using average wholesale prices established by the Michigan Department of Treasury.
Proponents of repealing the tax argue it has failed to produce the revenue lawmakers anticipated while placing additional pressure on licensed marijuana businesses.
State figures released earlier this year showed about $34 million had been collected during the first four months, compared with approximately $105 million that had been expected. The tax was originally projected to generate around $420 million annually.
Revenue from the wholesale tax is directed primarily to Michigan’s Neighborhood Road Fund for transportation infrastructure. A Michigan Department of Transportation financial plan released this month lists Treasury projections of $315 million from the tax in fiscal year 2026, increasing to $418 million in 2027 and $429 million in 2028. The department also notes that the tax remains subject to constitutional litigation that could affect future collections.
Repealing the wholesale levy would leave Michigan’s existing marijuana taxes intact, including the 10% retail excise tax approved by voters when recreational marijuana was legalized, as well as the state’s 6% sales tax.
HB 6224 is not the first effort this year to eliminate the tax. State Senator Jonathan Lindsey (R) introduced Senate Bill 810 in February with seven cosponsors, including three Democrats. That measure would also repeal the Comprehensive Road Funding Tax Act and remains pending before the Senate Government Operations Committee.
