Marijuana industry's case against new wholesale tax moves forward after judge rebuffs AG motion

OG article by Dustin Walsh

January 6, 2026

A Michigan Court of Claims judge has denied the state Attorney General's motion to dismiss a lawsuit by the Michigan Cannabis Industry Association challenging a new 24% wholesale marijuana tax effective January 1. The tax, passed via House Bill 4951 without supermajority support, is alleged to violate the constitution and the voter-initiated Michigan Regulation and Taxation of Marihuana Act (MRTMA).

Judge Sima Patel ruled factual disputes exist on whether the tax undermines MRTMA's aims of reasonable prices and reducing black market activity, potentially driving consumers to illicit sources. Discovery will examine impacts, with a hearing set for January 13.

Industry groups report severe effects, including closures and layoffs: C3 Industries shut a grow facility, cutting 62 jobs, citing unprofitability; Higher Love reduced nearly 30% of its workforce. Association representatives hail the decision as protecting voter intent against measures that could devastate licensed operators. An appeal on a denied injunction is pending.