COLDWATER, MI (WTVB) – — Marijuana retailers in Branch County and across Michigan reported a notable increase in sales as customers rushed to stock up before a new, significant 24% wholesale excise tax took effect on January 1, 2026.
This new levy, part of a state initiative to fund road repairs, is expected to create one of the highest overall tax burdens for cannabis in the nation, leading many consumers to anticipate higher prices at the register.
The tax, signed into law as part of the Comprehensive Road Funding Tax Act in October 2025, is applied when cannabis is sold from a cultivator or processor to a retailer, in addition to the existing 10% retail excise tax and 6% sales tax.
Dispensaries in Branch County, including those in Coldwater and Quincy, observed customers stocking up on products to avoid the impending cost increase. The sales uptick also coincided with holiday gift-giving and end-of-year consumption.
Industry insiders and business owners have expressed significant concern over the new tax’s impact, with some predicting it could drive consumers back to the illicit market and jeopardize the viability of smaller, locally owned operations.
State officials estimate the new wholesale tax will generate approximately $400 million to $420 million annually, primarily for road and infrastructure projects under Governor Gretchen Whitmer’s “Fix the Damn Roads” initiative. In the previous fiscal year, Branch County’s 16 licensed dispensaries contributed over $1.8 million in state-shared excise taxes to local governments from 2024 sales.
Despite the potential for increased state revenue, the industry faces an uncertain future as it navigates the new financial landscape, with one company already announcing the closure of a cultivation facility due to the changes.
So everyone is stocked up. Let the kids start raiding the supplies and the B & E s begin.