Michigan's newly approved marijuana tax has quickly become one of the most talked-about elements of Governor Gretchen Whitmer's $80 billion state budget. The 24% wholesale marijuana tax, passed after months of political gridlock, is designed to generate $420 million in annual revenue to fund road repairs and infrastructure projects. However, the new marijuana tax is already facing legal challenges that could determine its future.
Governor Whitmer signed the budget after contentious negotiations between Democrats and Republicans. While both sides claimed victories with Republicans celebrating government cuts and Democrats highlighting boosts to education the 24% marijuana tax stood out as the most controversial new funding measure.
Budget Director Jen Flood described the negotiations as among the toughest in Whitmer's tenure. She said the marijuana tax was a compromise, lower than initial proposals but still significant enough to fill Michigan's road funding gap. The new levy applies to cannabis wholesalers before retail sales occur, distinguishing it from the existing 10% excise marijuana tax voters approved in 2018.
Critics argue that lawmakers violated Michigan's constitution, which requires a three-fourths legislative vote to amend a voter-approved initiative.
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