Michigan hashish shops are closing as a direct results of a drastic tax enhance imposed on the $3.1 billion market earlier this yr that’s additionally bringing into state coffers a fraction of what was promised.
In response, a Republican state lawmaker on July 29 launched a invoice to repeal the tax, which he known as an “pointless burden” offered to the general public by “deceitful” elected officers, in response to Lansing, Mich.-based WLNS-6.
“Authorities shouldn’t stand in the best way of a aggressive market with extreme taxation,” state Rep. James DeSana advised the outlet.
“Repealing this wholesale tax is a commonsense step that helps Michigan companies, protects shoppers, and encourages participation within the authorized market.”
What are excessive taxes doing to the Michigan marijuana market?
Backed by Gov. Gretchen Whitmer, a brand new 24% wholesale hashish tax narrowly handed the state legislature in October and went into impact on Jan. 1 regardless of protests and predictions from hashish operators that authorized gross sales would plummet. Supporters, led by Whitmer, promised the tax would convey in additional than $400 million a yr to fund street repairs and different infrastructure enhancements.
Hashish is now taxed at three ranges in Michigan:
- The 24% wholesale tax, charged when product reaches the retailer
- A ten% excise tax, charged on the level of sale
- A 6% gross sales tax, additionally charged on the level of sale
A number of lawsuits have to this point didn’t defeat the tax. In the meantime, amid value compression introduced on partially by oversupply, the state collected simply $34 million in new tax income by way of April 30, far under the projected $105 million.
Hashish retailers additionally reported a double-digit drop in gross sales after the tax was imposed.
Are hashish shops in Michigan closing in response to larger taxes?
That development has continued and, within the case of the Greater Love hashish retailer chain, led to the closure of 5 of its 9 areas within the Higher Peninsula, firm president Joni Moore lately advised WLUC.
Statewide, the variety of licensed retailers declined from 845 in June 2025 to 836 in June 2026, the newest knowledge out there, in response to the state Hashish Regulatory Company.
The scenario in Michigan is per different mature markets which have raised taxes over the pleas of operators. In California, the nation’s largest state market, gross sales fell to under $4 billion in 2026 after a short-lived hike in that state’s excise tax from 15% to 18%. However regardless of a return to fifteen%, gross sales have but to totally get better.
DeSana had harsh phrases for the tax and its supporters.
“I believe it was deceitful,” he advised WLNS. “I believe they knew the tax wasn’t going to come back wherever close to the $410 million projected.”
“I simply suppose there’s so many different ways in which this market works that attempting to place a wholesale tax on only one part of the market was actually mistaken,” he added.
