LANSING, Mich. (Michigan News Source) — Michigan’s plan to fund road repairs with a 24% wholesale tax on marijuana hit a legal pothole just hours after Governor Gretchen Whitmer signed it into law.
The Michigan Cannabis Industry Association filed suit on October 7, arguing the new tax violates the state constitution by effectively rewriting a voter-approved 2018 ballot initiative that legalized recreational marijuana and set a 10% excise tax.
“The last-minute, late-night process occurred in violation of a range of other constitutional provisions,” attorney Douglas Mains said, calling on the court to strike the tax entirely.
The levy—tucked inside the new Comprehensive Road Funding Tax Act—was the centerpiece of Whitmer’s budget deal, projected to generate about $420 million a year for road projects.
But the association argues lawmakers needed a three-fourths supermajority to change any part of the original voter law, and the tax passed with barely half the votes in the Senate.
Supporters, including Rep. Alabas Farhat (D-Dearborn), insist it’s legal. “Our lawyers have made it clear this will withstand a legal challenge,” Farhat said, arguing the tax applies only to wholesale transactions, not retail sales covered by the 2018 act.
The association, representing 400 licensed cannabis businesses, disagrees—calling the 24% surcharge a direct violation of what voters approved.
If the lawsuit succeeds, it could unravel Whitmer’s bipartisan road funding deal before the first shovel of asphalt hits the ground.