COLDWATER, MI (WTVB) – Michigan’s cannabis industry has ramped up its legal battle against the state’s new 24% wholesale tax, filing a second lawsuit this week to block the levy.
The Michigan Cannabis Industry Association (MiCIA) argues that the tax implemented in January to fund road repairs unconstitutionally layers multiple taxes onto a single product, a practice they describe as “tax pyramiding.”
By adding this wholesale charge on top of existing 10% excise and 6% sales taxes, the plaintiffs contend the state is effectively exceeding the 6% sales tax cap mandated by the Michigan Constitution.
This latest challenge joins an ongoing lawsuit that claims the tax was illegally passed by a simple legislative majority rather than the three-fourths supermajority required to amend voter-initiated laws like the 2018 legalization act.
While state officials argue the wholesale tax is a separate road-funding measure that does not interfere with previous initiatives, industry leaders warn the increased financial burden will shutter small businesses and drive consumers back to the unregulated market.
As the state Treasury prepares for the first quarterly payments due this month, the legal standoff is widely expected to reach the Michigan Supreme Court
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