Michigan Cannabis Sales Plummet Amid 24% Tax

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Michigan's legal cannabis market may have just posted its worst monthly sales performance in more than two years, with preliminary industry data projecting sales dropped to about $206.18 million in February, a 14.8% decline from February 2025. Many industry operators say the decline is tied to the state's controversial new 24% wholesale marijuana tax.

Why it matters

The sharp drop in cannabis sales raises concerns about the long-term viability of Michigan's $3 billion legal marijuana industry, which has faced increasing competition from the illicit market as high taxes and regulatory burdens make it difficult for licensed businesses to compete on price and product selection.

The details

According to cannabis analytics firm Headset.io, Michigan cannabis sales fell 14.8% in February compared to the same month a year earlier. Industry experts attribute the decline to the state's new 24% wholesale marijuana tax, which was implemented in January 2026 and has significantly increased costs for licensed cannabis businesses.

• Michigan's new 24% wholesale marijuana tax was implemented in January 2026.
• Preliminary industry data shows Michigan cannabis sales dropped in February 2026 compared to February 2025.

What’s next

Industry groups are expected to lobby state lawmakers to lower the 24% wholesale tax rate, arguing it is driving consumers to the illicit market and threatening the viability of licensed cannabis businesses.