Michigan Cannabis Industry Seeks Tax Relief

State senator introduces bill to repeal 24% wholesale tax on marijuana

Published on Mar. 4, 2026

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The Michigan Cannabis Industry Association is supporting legislation from state Senator Jonathan Lindsey that would repeal the state's new 24% wholesale tax on marijuana. The association says the tax has already led to facility closures, layoffs, and a shift of customers back to the illicit market as businesses struggle with the slim margins.

Why it matters

The cannabis industry in Michigan was carefully structured with a balanced tax plan when marijuana was legalized, but the new 24% wholesale tax has disrupted that model and is threatening the viability of legal cannabis businesses in the state.

The details

The new 24% wholesale tax on marijuana was approved by Michigan lawmakers during last-minute budget negotiations last October. The Michigan Cannabis Industry Association says dispensaries have seen a 16% drop in business since the tax was implemented, leading to facility closures, layoffs, and a reduction in employee hours and benefits. The association argues the tax will not generate the $420 million in projected road funding that lawmakers expected, as customers turn back to the illicit market to save money.

  • The 24% wholesale tax on marijuana was approved by Michigan lawmakers in October 2025.
  • The tax went into effect in January 2026, leading to the 16% drop in business for dispensaries.

The players

Jonathan Lindsey

A Republican state senator representing Cass County and part of Berrien County, who has introduced legislation to repeal the 24% wholesale tax on marijuana.

Robin Schneider

The director of the Michigan Cannabis Industry Association, which is advocating for the passage of Lindsey's bill to repeal the tax.

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What they’re saying

“It's pretty bad. We're already seeing facility closures. Our businesses prior to the tax were already operating payroll to payroll. Our margins are slim in the industry, and so what we've seen are mass layoffs of employees, a reduction in hours from full-time to part-time, a lot of loss of benefits.”

— Robin Schneider, Director, Michigan Cannabis Industry Association (moodyonthemarket.com)

“The state is never going to get their projected $420 million for road funding because it isn't going to exist anymore. And that's what happens when the government singles out one industry and overtaxes them.”

— Robin Schneider, Director, Michigan Cannabis Industry Association (moodyonthemarket.com)

What’s next

The Michigan Cannabis Industry Association intends to advocate for the passage of Senator Lindsey's bill to repeal the 24% wholesale tax on marijuana.

The takeaway

The new 24% wholesale tax on marijuana in Michigan has severely disrupted the carefully balanced tax structure that was put in place when the state legalized cannabis, threatening the viability of legal businesses and driving customers back to the illicit market. The industry is now seeking legislative relief to undo the tax and restore the original model.