LANSING, Mich. (Michigan News Source) – Michigan lawmakers are lighting up new revenue streams with a 24% marijuana excise tax rolled into the newly passed state budget.

Marijuana businesses in Michigan will contribute a projected $420 million from the newly implemented tax towards Michigan’s roads. State budget negotiators say the marijuana tax will provide a stable new revenue source for long-needed road repairs that continue to pile up.

Michigan marijuana rules.

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Medical marijuana has been legal in Michigan since 2008, but voters approved a recreational marijuana ballot proposal in 2018.

With the drug’s approval came strict measures about who can buy and sell it. Only licensed dispensaries may sell marijuana legally. In addition, buyers must be at least 21-year-old to purchase marijuana for recreational use. Patients who use the drug for medical reasons must have a valid medical marijuana card.

In addition, there are laws about how much marijuana one can possess, and how the drug can be cultivated and grown.

Cannabis businesses and customers expected to feel the burn.

Under the newly minted state budget, the tax would kick in when a grower or processor first sells their marijuana to a retail store or center.

Many in cannabis business say the market is oversaturated, and driving around most Michigan communities and looking at storefronts proves their point. In addition, retailers say the prices are unsustainable and the profit margin will decrease dramatically.

Those in the business, along with those who benefit from it, are raising their voices.

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Mike DiLaura is the CCO and general counsel for House of Dank, a cannabis dispensary. He told Michigan Advance the state should keep its hands off their wallets. “Our industry is not their piggy bank,” he said. “It is our time, not just as an industry, but as citizens of this great state, to put our feet down and say, ‘enough is enough.’”

One commenter on Facebook asked someone to explain the new marijuana tax which she says makes no sense. “Why do pot smokers have to be the only ones paying for the road fixes?” The commenter continued, “That’s not right. It should be taxed on gas, property tax, plates/tags tax….”

Another person pushed back against lawmakers and the way they ignored Michigan voters. “This increase will significantly harm Michigan’s cannabis industry and essentially undermines the will of the people who voted to legalize marijuana in 2018,” he said.

In addition, State Senator Jeff Irwin (D-Ann Arbor) posted on social media in the early morning hours of Oct. 3. He said the new tax will “lead to businesses closing, jobs lost and less money coming to Michigan from other states.  Sen. Irwin continued, “This massive tax increase adopts the failed model that California is moving away from.”

The new tax goes into effect on Jan. 1, 2026.