Michigan Bill Would Repeal 24% Wholesale Cannabis Tax

A bill introduced last week in Michigan seeks to repeal the 24% wholesale
tax on cannabis products that went into effect January 1. State Sen.
Jonathan Lindsey (R), the bill’s sponsor, said in a statement that he
“opposed” the tax “because it represents an unnecessary growth of
government.”

“Lansing’s budget does not need to grow larger; we simply need better
discipline. This tax will also damage Michigan businesses and lead to
widespread job losses across the state, which are already being reported. I
also don’t believe that in the long term this mechanism will generate the
expected revenue, especially if sales go down as a result of the increased
taxes or if legal challenges against the tax prevail.” — Lindsey in a press
release

Prior to the tax increase, there was no tax on wholesale cannabis
transactions in Michigan. When lawmakers approved the tax, officials
estimated it would raise $420 million in revenue annually for road
construction and repairs. The tax is being challenged by the Michigan
Cannabis Industry Association, which argues in its lawsuit that when voters
approved the adult-use reforms in 2018, the proposal only included a 10%
excise tax on retail sales, and that the lawmaker-approved hike was not
passed lawfully because changes to voter-initiated laws require a
three-fourths supermajority.

Lindsey added that his repeal legislation – which includes three Democrat
and four Republican co-sponsors – “is about reining in the government’s
constant attempt to get just a little bit more out of people.”

The bill was referred to the Senate Committee on Government Operations.