LANSING – Michigan officials are escalating their fight to preserve a controversial new 24% wholesale marijuana tax, formally asking the Michigan Supreme Court to step in and halt ongoing lower court proceedings.
The state is pushing an aggressive timeline, requesting that justices consider its motion by May 1 and ultimately dismiss the lawsuit by September 1. If granted, the move would freeze the current legal battle while the high court decides whether the tax itself is lawful.
At stake: hundreds of millions in potential tax revenue — and the future structure of Michigan’s cannabis industry.
A constitutional fight with big stakes
The case stems from lawsuits filed by the Michigan Cannabis Industry Association (MiCIA) and Holistic Research Group, a Harrison Township-based cannabis operator.
The plaintiffs argue the wholesale tax is unconstitutional, claiming lawmakers sidestepped voter protections built into Michigan’s legalization law.
Under the Michigan Regulation and Taxation of Marihuana Act, approved by voters in 2018, any changes to the law require a three-quarters supermajority vote in both the House and Senate. Industry groups say that threshold was not met when the wholesale tax was enacted.
“This is about protecting the will of the voters,” industry representatives have argued in court filings and public statements.
Industry warns of economic ripple effects
Beyond the legal arguments, cannabis leaders say the tax itself is already putting pressure on an industry that had been one of Michigan’s fastest-growing economic sectors.
The Michigan Cannabis Industry Association, which represents hundreds of licensed businesses, has warned the added tax burden could force operators to cut jobs, scale back operations, or shut down entirely.
MiCIA spokesperson Rose Tantraphol has previously cautioned that policies like the wholesale tax risk destabilizing the legal market.
“Businesses will close and neighbors will lose jobs,” Tantraphol said in earlier comments opposing the tax.
That warning comes as Michigan’s cannabis market is already showing signs of strain, including declining monthly sales and continued price compression driven by oversupply.
The state’s argument: funding roads, preserving revenue
State officials, however, argue the tax is a necessary piece of a broader effort to fund road repairs and infrastructure.
Allowing the lawsuits to proceed in lower courts, the state contends, creates uncertainty around a major revenue stream — one they are now asking the Supreme Court to resolve quickly.
The request to pause proceedings signals how high the stakes have become, not just for cannabis businesses, but for the state budget itself.
What happens next
If the Michigan Supreme Court agrees to hear the case and grant a stay, the legal fight will shift entirely to the state’s highest court — potentially accelerating a final decision on the tax’s legality.
If the court declines, the case will continue moving through lower courts, prolonging uncertainty for both regulators and the cannabis industry.
Either way, the outcome will likely determine whether Michigan’s cannabis tax structure remains intact — or is fundamentally rewritten.
