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A weed tax to pay for roads? Michigan marijuana industry says it's not that simple.

barneyelias0
8 hours ago
2 min read

OG Artice By Arpan Lobo

September 30 2025

The Proposal

Michigan’s House passed a budget deal on September 25, 2025, including a 24% wholesale tax on cannabis to fund roads. The tax aims to raise $420 million annually for a Neighborhood Road Fund, part of a $1.5 billion road repair plan.

Industry Impact

Price Hike: The tax will raise cannabis prices, pushing consumers to illegal markets, says Robin Schneider of the Michigan Cannabis Industry Association.
Job Losses: Low margins mean businesses may cut jobs to offset the tax.
Closures: Smaller cannabis shops could shut down due to financial strain.

Current Market

Cannabis prices are falling. In August 2025, an ounce of flower averaged $61.79, down from $80.14 in August 2024, per the Cannabis Regulatory Agency. Michigan’s 10% excise tax and 6% sales tax already apply. The proposed 24% wholesale tax would be the second-highest in the U.S., behind Washington’s 37%, says the Tax Foundation.

“This is going to very much harm our young industry,” Schneider said.

Negotiation Details

Origin: Gov. Gretchen Whitmer proposed a 32% tax; House Speaker Matt Hall negotiated it down to 24% (September 25 news conference).
Purpose: Funds road repairs, a priority for Whitmer, Hall, and Senate Majority Leader Winnie Brinks.
Status: Needs Senate approval and Whitmer’s signature by October 1 to avoid a government shutdown.

Industry Response

The Michigan Cannabis Industry Association plans a Capitol protest to urge senators to reject the tax. Brinks supports the budget, citing roads, education, and healthcare as priorities (budget statement).

Legal Dispute

Schneider argues a supermajority vote is needed to alter voter-approved cannabis laws. Hall claims only a simple majority is required, as the tax doesn’t change the existing excise tax.

Expert Concerns

Chris Silva, a cannabis consultant, warns the tax could bankrupt half the industry. Larger firms may survive, but small businesses face collapse. He notes unregulated “hot” hemp and THC-8 sales are bigger issues the state should address.