Court of Claims to hear challenge to Michigan's impending 24% tax on marijuana

OG article by Rick Pluta November 25, 2025

Michigan's Court of Claims in Detroit will hear oral arguments Tuesday on a lawsuit challenging a new 24% wholesale tax on marijuana, effective January 1, with Judge Sima Patel expected to rule swiftly and possibly fast-track appeals to the state Supreme Court. Filed by the Michigan Cannabis Industry Association (MCIA) and others, the suit contends the tax—passed in an $80 billion budget deal last month and signed by Gov. Gretchen Whitmer—violates the 2018 voter-approved ballot initiative that imposed a 10% retail tax to fund industry development, requiring supermajority legislative approval for any additional taxes on the same subject. MCIA spokesperson Rose Tantraphol decried it as an "unconstitutional Trojan Horse," stating, “This was an unconstitutional move. End of sentence. Full stop,” arguing it stacks unfairly on existing levies without voter or supermajority consent, amid "chaotic middle-of-the-night actions." The tax, projected to raise $420 million for roads, applies to wholesale prices in a new statute, which the state defends as distinct from retail regulation. Industry leaders warn thin margins—already pressured by competition—will force closures, with many retailers planning to shutter. Robert Schneider of the Citizens Research Council noted the case pivots on whether the taxes are sufficiently different. Plaintiffs seek an injunction halting collection during litigation; the state opposes. A State Budget Office spokesperson declined comment on the pending matter. This high-stakes battle could reshape Michigan's cannabis fiscal policy, where legal sales hit $3 billion last year, balancing revenue needs against voter intent and business viability.