Michigan Lawmakers Seek to Repeal 24% Cannabis Wholesale Tax

Bipartisan group of state senators argue the new levy is already hurting the industry and leading to business closures.

Published on Mar. 3, 2026

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A bipartisan group of Michigan state senators has introduced a bill to repeal the state's controversial 24% wholesale marijuana tax, which they argue is already damaging businesses and leading to job losses across the cannabis industry.

Why it matters

The new wholesale tax, implemented in January 2026 as part of a road-funding package, has contributed to a decline in recreational cannabis sales and the closure of over 900 licensed businesses in the state. Lawmakers are concerned the tax will continue to undermine the legal market and fail to generate the expected revenue for road repairs and other priorities.

The details

State Sen. Jonathan Lindsey, a Republican from Coldwater, introduced Senate Bill 810 to eliminate the 24% wholesale tax. Lindsey and other bipartisan co-sponsors argue the tax is 'damaging Michigan businesses and leading to widespread job losses' in an industry that was previously one of the state's fastest-growing job creators. The legislation has the backing of both Republican and Democratic state senators.

  • The 24% wholesale tax took effect on January 1, 2026.
  • In January 2026, the first full month under the new tax, recreational cannabis sales fell 8.2% compared to a year earlier, reaching the lowest monthly total since February 2023.

The players

Jonathan Lindsey

A Republican state senator from Coldwater who introduced Senate Bill 810 to repeal the 24% cannabis wholesale tax.

Gretchen Whitmer

The governor of Michigan who backed the road-funding package that included the 24% wholesale tax.

Michigan Cannabis Industry Association

The industry group that has sued the state in the Court of Claims, arguing the wholesale tax is unconstitutional.

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What they’re saying

“This is about reining in the government's constant attempt to get just a little bit more out of people. Lansing must realize that growing government by taxing businesses into oblivion has never been, and will never be, a way to encourage a healthy Michigan economy.”

— Jonathan Lindsey, State Senator (metrotimes.com)

“I don't believe that in the long term this mechanism will generate the expected revenue, especially if sales go down as a result of the increased taxes or if legal challenges against the tax prevail.”

— Jonathan Lindsey, State Senator (metrotimes.com)

What’s next

The judge in the case will decide on Tuesday whether or not to allow the Michigan Cannabis Industry Association's lawsuit against the state to proceed.

The takeaway

This case highlights the delicate balance between generating tax revenue and supporting the growth of the legal cannabis industry. Lawmakers must carefully consider the long-term impacts of new taxes, as overly burdensome levies could undermine the legal market and lead to unintended consequences like business closures and job losses.