Michigan marijuana sales plummet following 24% tax that went into effect in January

COLDWATER, MI (WTVB) – Michigan’s cannabis industry is facing a severe economic downturn following the implementation of a new 24% wholesale excise tax in January, a central component of Governor Gretchen Whitmer’s “Fix the Damn Roads” initiative.

State Cannabis Regulatory Agency data shows that total sales plunged 16% in January compared to December 2025, falling to $226.4 million, the lowest monthly total since late 2022. While industry experts suggest some of this decline was due to consumers stocking up in December to avoid anticipated price hikes, the tax has added a third layer to an already complex tax structure that includes a 10% retail excise tax and a 6% sales tax.

This “triple-tax burden” is reportedly crushing profit margins for businesses already struggling with record-low flower prices, leading to widespread reports of layoffs and permanent facility closures across the state.

In response to the market instability, State Senator Jonathan Lindsey (R-Coldwater)  introduced Senate Bill 810 last week to completely repeal the wholesale levy.

The bill, which has gained bipartisan support from four Republican and three Democratic co-sponsors, seeks to return Michigan to the original tax framework approved by voters in 2018.

Lindsey says the decline in sales is just the beginning of what could be a rough road for the industry

Proponents of the tax argue it is a necessary predictable revenue stream, expected to generate approximately $420 million annually for the Neighborhood Road Fund to repair local infrastructure.

However, Senator Lindsey contends the tax represents an “unnecessary growth of government” that threatens the long-term viability of the legal market and may fail to meet revenue goals if sales continue to decline. The legislative push for repeal coincides with ongoing industry lawsuits that claim the tax is unconstitutional because it modified a voter-approved initiative without the required three-fourths supermajority in the Legislature.