LANSING, MI (WTVB) – Michigan’s new 25-percent wholesale tax on cannabis products, enacted on January 1, is falling severely short of its initial revenue projections.
The tax generated just $34 million during the first three months of 2026, a stark contrast to the $86 million originally forecasted by the Michigan Treasury Department. Treasury spokesperson Danelle Gittus defended the program’s slow start, noting that the tax is both new and complex.
She emphasized that several variables can heavily impact the collection of the tax as implementation moves forward.
Meanwhile, industry leaders are calling the shortfall a predictable outcome of poor policy.
Michigan Cannabis Industry Association executive director Robin Schneider stated that the state’s plan to pay for road funding with the cannabis tax “has failed exactly as the cannabis industry said it would.” Critics within the market argue that the high wholesale rate drives consumers back to the illicit market, further dampening state tax collections.
As lawmakers face a massive budgetary gap for infrastructure projects, pressure is mounting to reevaluate the tax structure.
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