Michigan’s Wholesale Cannabis Tax Generating Far Less Revenue Than Predicted

The 24% wholesale cannabis tax Michigan lawmakers passed last year generated far less revenue in its first quarter than projected, The Detroit News reports.

Lawmakers designed the legislation to fund road construction and repairs in the state, and the nonpartisan House Fiscal Agency estimated that the 24% wholesale tax would generate about $420 million per year. The state received less than $34 million in the first months of the new tax, which is less than a third of the quarterly expectations.

The Michigan Cannabis Industry Association (MICIA) argued last year that the wholesale tax was unconstitutionally tampering with the state’s voter-approved cannabis framework, but the courts refused to block the tax from taking effect on January 1.

“Our elected leaders made the cannabis industry a sacrificial lamb in order to have the illusion of a road funding fix,” MICIA executive director Robin Schneider said in the report.

“In reality, the only thing they have accomplished is the decimation of a strong industry that served as an economic driver for this state. The result is business closures, jobs lost and tax revenue taken away from local governments.” — Schneider, via The Detroit News

The trade group filed a second lawsuit challenging the wholesale cannabis tax in March.