Michigan Gov. Gretchen Whitmer (D) has unveiled a new proposal to include cannabis products in the state’s wholesale tax—currently applied to tobacco and other smoking products—as part of a broader plan to generate funding for infrastructure projects, the Detroit News reports. The initiative could raise an estimated $470 million to support road and bridge repairs across the state.
According to Whitmer’s team, the move would “close a loophole that exempted the marijuana industry from the wholesale tax.” However, specific details on how the tax would be applied have not been disclosed.
Michigan legalized adult-use cannabis in 2018, with retail sales currently taxed at 10% under state law. The proposed change would subject cannabis to Michigan’s 32% wholesale tax on tobacco, potentially making it one of the highest-taxed cannabis markets in the U.S.
Robin Schneider, executive director of the Michigan Cannabis Industry Association, noted that any tax adjustments would require a three-fourths majority vote in the Legislature. The cannabis industry is expected to push back against the proposal, citing concerns over consumer costs and market stability.
The tax increase is part of a broader $3 billion infrastructure plan that also includes hikes on gasoline taxes, a tax on big tech companies, and an extension of wholesale taxes to other smoking and vaping products.
