Michigan’s cannabis industry is pushing against a proposed wholesale tax on marijuana products that lawmakers want to use to pay for road repairs in the upcoming state budget. Advocates argue that the new levy is set far too high and would damage one of the state’s fastest-growing industries by cutting jobs and stalling future investment.
Two Democratic legislators, Representatives Mike McFall and Donavan McKinney, joined a rally at the Capitol this week, signaling that they are actively working to reduce the rate before the final budget vote. Both lawmakers stated that they will not support the current plan, and if it proceeds unchanged, they intend to vote against it.
The draft budget includes a 24% tax on cannabis products sold by licensed dispensaries. News of the rate immediately triggered alarm among marijuana operators, who warned that such a steep tax would hurt their ability to compete, reduce revenue for small towns, and slow down job creation.
While negotiations on the state budget continue, leaders made it clear that the government would remain open as the new fiscal year begins. Still, funding for road repairs must be secured somehow, and legislators are split on whether to pull that money from school budgets or rely heavily on this new cannabis tax.
Advocates argue that Michigan has already collected close to $2 billion in tax dollars from cannabis sales over the past five years. They believe the state should look elsewhere for money to fund infrastructure projects instead of squeezing more out of their sector. Some warned that if the plan passes, the fight will not stop at the Capitol but may continue in court or through a campaign to repeal the measure altogether.
McFall pointed out that cities such as Hazel Park rely heavily on cannabis-related tax income. His community, for example, brought in about $500,000 last year, money that paid for police, fire, and other essential services. He warned that a high tax could reduce revenue sharing and hurt municipalities statewide.
McKinney added that the cannabis market has revitalized neighborhoods along the Eight Mile corridor, turning abandoned spaces into thriving businesses. He criticized the proposed rate as unreasonable and promised to resist any plan that puts an unfair burden on the industry, though he admitted lawmakers may still have to negotiate a smaller tax to secure funding for roads.
Across the country, high marijuana taxes have been one of the major costs that companies are grappling with, and multistate firms like Curaleaf Holdings Inc. (TSX: CURA) (OTCQX: CURLF) have been compelled to devise innovative ways to remain profitable in these challenging circumstances.
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