Berkley — Metro Detroit cannabis dispensaries say sales have ticked up in recent weeks as customers stock up ahead of a new 24% tax set to take effect Jan. 1.The increase in sales reflects a combination of the pending tax, holiday gift-giving and higher consumption around the end of the year, retailers say.“We see people coming in, stocking up,” said Jerry Millen, owner of Greenhouse of Walled Lake. “There are people coming in from out of state. I think you see a lot of people just before Christmas, New Year. We’re starting to see it now.”One thing looming over the industry is the new tax on adult-use cannabis, approved as part of the state’s road funding package that begins Jan. 1. The tax applies at the wholesale level, but some consumers worry it could lead to higher prices at the register.“There’s probably some angst out there in the customer base regarding the road tax and its impact on pricing in 2026,” said Adam Saj, vice president of supply chain and support services for Lume Cannabis Co., which has 39 dispensaries in Michigan. “In late September when the news reports started coming out regarding House Bill 4951, we did see a notable uptick in October. As we approach the New Year, we do anticipate that’s going to occur again.”The tax, built into the Comprehensive Road Funding Tax Act, applies when marijuana is first sold or transferred to a retailer and is separate from the current 10% excise tax on recreational marijuana and the 6% state sales tax consumers pay on purchases.Lawmakers say the new tax is expected to generate $420 million each year for road and infrastructure repairs. Cannabis businesses and industry groups have opposed the tax, saying it will drive up prices for consumers and strain an industry already dealing with falling prices and consolidation. The Michigan Cannabis Industry Association, which represents about 400 licensed marijuana businesses, has challenged the matter in court, but so far the tax is expected to take effect as planned after a Michigan Court of Claims judge upheld its legality this month.”We remain steadfast in our belief that when the Legislature imposed this 24% wholesale tax, it violated the will of the voters who approved the 2018 citizen ballot initiative,” said Rose Tantraphol, MiCIA spokesperson, in an email.Get the Michigan Politics newsletter in your inbox.Washington and Lansing, red and blue, we’ve got your government covered.Delivery: DailyYour EmailTantraphol said the association is working with its attorneys to finalize an appeal of the ruling by Judge Sima Patel, who said the new wholesale tax bill was “consistent” with the ballot proposal’s text, which recognized “other taxes.”Tantraphol said cannabis customers have said they feel their dollars are already stretched thin, and they aren’t willing to spend more.”Businesses will close,” she said. “Our neighbors will lose jobs. The wholesale tax hasn’t kicked in yet, and already one cannabis operation in Webberville will be closing, another business has told us it will close soon, and one business in the Upper Peninsula permanently laid off 61 employees this week.”Caroline Shenkosky, a budtender at Lume Cannabis Co., right, assists a customer on Wednesday, Dec. 17, 2025 at the store in Berkley. Adam Saj, vice president of supply chain and support services for Lume, says the company is working to keep its consumers from being hit with the full 24% wholesale marijuana tax that takes effect Jan. 1. Katy Kildee, The Detroit NewsHOW CUSTOMERS ARE RESPONDINGMaddie Fowler, 23, of Royal Oak, said she was concerned about the potential impact the tax could have on prices. She recently stopped by Lume in Berkley to purchase a weed cartridge and vape pen.”Disappointment, mainly, too, because it was already a big battle to get it legalized …,” she said. “It’s just kind of like, all right, let’s make it more expensive. It was kind of frustrating to hear.”Fowler said she didn’t have plans to bulk-buy ahead of the tax, but she plans to be more mindful of her purchases.Saj, with Lume, said the company is aware of concerns over the new tax but is working to keep costs manageable for customers.“Will prices go up in 2026? Yes, but not by this scary 24%,” he said. He added that Lume is dealing with vendors who are willing to absorb some of the cost, helping ensure that the increases are smaller than some consumers might expect.Saj encouraged customers who are concerned to visit Lume stores before the end of the year if they want to stock up. He said there may be a few items that see little to no price increase in 2026. For example, a $10 item may increase by a dollar, he said.Fowler said she’s encouraged that the price increases may not be as high as she expected, but she still worries about how dispensaries will manage.”This is my favorite place to go, but that is a concern,” she said. “I was thinking, like a lot of dispensaries, I wonder if they do make enough money to begin with, or they could kind of cushion this cost.”Dozens of varieties of cannabis flower are on display inside Lume Cannabis Co. on Wednesday, Dec. 17, 2025, in Berkley. Katy Kildee, The Detroit NewsDuane Byers, 62, of Detroit said he plans to take things week by week. He recently stopped by Lume in Berkley for some prerolls.”It hasn’t hit me yet because it hasn’t started yet,” he said. “So probably I’ll get a shock when I come in here next month and see how much additional it’s gonna be. I’ll probably make some changes, because if it’s gonna be a lot more, then I have to probably think about how I buy in a different way.”Byers said even small increases can add up.”When you buy $50 and $60 then now you’re looking at an additional $6 or $7,” he said. “It’s not that much when you buy a small item, but you buy a large item, then it’s gonna look more significant.”BUSINESSES GEAR UPIn Walled Lake, Greenhouse plans to lean more on its medical marijuana license as it navigates the new 24% wholesale tax, which does not apply to medical cannabis. Millen said he expects some customers who let their medical licenses lapse to renew them to avoid higher prices on recreational products.”It’s very hard to source medical products now, but we have quite an extensive collection of medical products,” Millen said. “And the nice thing about the way the Greenhouse is set up, I have two separate rooms. I have a recreational room and a medical room, so you don’t have to come wait in the line of 500 people on the rec side.”To lessen the impact of the tax, Millen said earlier this year he purchased a cannabis grow operation and renewed both medical and recreational grow licenses, allowing Greenhouse to produce its own medical-grade flower.Millen said he doesn’t plan to raise the prices of any of his products until he absolutely needs to.”I’m trying not to raise prices for hopefully three, four or five months, I’m hoping,” he said. “That’s my hope. That’s why I spent all this money on flower to pass (savings) on to the consumer.”Nick Hannawa, vice president and part-owner of Puff Cannabis, said customers are stocking up ahead of the new tax, and that the company has placed large orders to maintain low prices for the time being. The company has 13 dispensaries in Michigan.Hannawa criticized the tax as well as the legislature’s rollout, calling it unclear and leaving more questions than answers about how the tax will be collected.”This could be get very messy,” he said. “We asked the (Cannabis Regulatory Agency) for guidance. They’re trying to get us guidance.”Hannawa said Michigan cannabis businesses already operate with thin margins and face stiff competition. He said larger operations like Puff may be able to weather the change, but smaller operators could be hit hard. It could also potentially drive more activity to the black market, he said.”What Puff is going to do is we, along with our partners, we’re going to continue to fight for reform to get this overturned,” he said. “I’m sure this will go all the way to the Supreme Court. So we hope to continue to fight.”Despite the issues, Millen said he expects the cannabis industry to continue in Michigan: “It’s not going to kill the industry. The industry will be fine. The consumer on the recreational side will have to pay a little bit more, but they will.”Byers, the Lume customer, had the same sentiment.”I don’t think anyone will be stopping,” he said. “Because most of the people that smoke gonna keep smoking.”
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