LANSING, Mich. (WILX) – Michigan’s 24% wholesale tax on marijuana is facing another legal challenge.
The Michigan Cannabis Industry Association filed a lawsuit Friday claiming the tax is unconstitutional. The association, which previously filed a lawsuit against the tax, argues the wholesale tax acts as a sales tax and causes over-taxation for consumers.
“Cannabis is taxed multiple times, resulting in something called tax pyramiding. This tax pyramiding imposes an effective sales tax rate on consumers that’s higher than the state’s legal 6%,” said Rose Tantraphol, a spokesperson for the Michigan Cannabis Industry Association.
The association said the tax is already having negative impacts on marijuana sales in 2026. Data from the Michigan Cannabis Regulatory Agency shows that between December 2025 and January 2026, total sales dropped nearly $43 million ($269 million in Dec. ‘25 to $226 million in Jan. ’26). In February, marijuana sales totaled $234 million.
Tantraphol said the consequences could worsen.
“The industry has created 47,000 jobs and all of that is in jeopardy with this 24% tax,” Tantraphol said.
Legal experts said the lawsuit could face challenges. Anastase Markou, managing partner at MML Defense, said the suit may have to turn into a class action if the court rules the association itself is not the correct plaintiff.
“One of the questions is: are they the proper person suing? You have to have standing to sue. You have to be the one negatively impacted by this,” Markou said.
Markou said the association does have a legitimate case. The wholesale tax entered its fourth effective month in March.
“Anytime at all that you call a tax something, that matters less than what it is. The association is claiming is claiming that it is a form of a sales tax and Michigan has a prohibition on sales tax being any more than 6%.”
Representative Joe Aragona, (R-Clinton Township) says if the tax is ruled unconstitutional, road funding would remain untouched and cuts would have to be made elsewhere.
He adds that the governor’s team believes they are in good standing in the lawsuit.