As Michigan gears up for a new year, the state's cannabis industry braces for more than just resolutions. Come January 1, dispensaries and growers face a 24% wholesale tax on marijuana products, a move affirmed by the Michigan Court of Claims and met with industry backlash. Forming the crest of a fiscal wave meant to inject $420 million into road repairs, the levy is part of a broader state budget passed in October aiming to rejuvenate Michigan's infrastructure. Cannabis industry leaders, however, are not rolling over. The Michigan Cannabis Industry Association (MiCIA), represents more than 400 producers and has filed a lawsuit to overturn what they deem an onerous tax—less than 24 hours after Governor Gretchen Whitmer inked it into law, according to CBS News Detroit.
Balking at the ruling, MiCIA spokesperson Rose Tantraphol expressed the group's resolve in a statement obtained by WWMT, "We don't believe the court of claims made the right call. While we're deeply frustrated by this ruling, I can tell you this: the fight is far from over." Al Williams, President of the Detroit Cannabis Industry Association, voiced his constituency's concerns to CBS News Detroit as being more about the industry's viability than road repair funding.
The impending tax looms large for business owners who foresee its ripple effects. Not only could prices for consumers increase, but businesses also anticipate potential job losses. Andrew Sereno, President of Glacier Cannabis, candidly shared with WWMT the grim outlook for his shareholders—his letter suggests pausing dividends in anticipation of the financial squalls ahead. Abbas Chami, CFO of Green Acres, voiced to CBS News Detroit a fear that the higher operational costs could push consumers towards the black market, exacerbating the issue.
Amidst these concerns, some customers at local dispensaries are considering a pivot to medical marijuana, which remains untaxed under the new law. "I feel like there are better ways to do that besides for just taxing the working man’s cannabis," said Jackson Shriver, a dispensary customer to WOODTV. In the same vein, Casey Kornoelje, owner of Pharmhouse Wellness, outlined to WOODTV what might be an incentive for some, advising customers with qualifying conditions to get medical cards to sidestep the forthcoming tax.
The cannabis industry in Michigan has flourished since the green light for recreational use in 2018, yet now faces a crossroads. The discourse continues between sustaining a booming business model and fulfilling civic needs, such as road repairs, through the application of taxes. With MiCIA primed to appeal the Court of Claims decision, the debate over the tax's legality and economic impact is set to extend into the new year, ensuring that Michigan's marijuana saga is far from reaching its denouement.
