Michigan Approves 24% Cannabis Tax Effective Jan. 1, 2026

Michigan lawmakers approved a 24% wholesale marijuana tax as part of the state’s 2026 budget; the levy is set to take effect Jan. 1, 2026 and is projected to generate about $420 million annually for road funding, with initial allocations this fiscal year directed to road funds. Added to Michigan’s existing 10% excise and 6% sales taxes, the tax pushes the effective cannabis tax burden to roughly 40%, making the state one of the highest-taxed markets. Cannabis businesses, small growers and retailers warn the wholesale tax will raise retail prices (industry estimates $3–$4 per gram), squeeze smaller operators, reduce selection and push consumers back to the unregulated black market, and could worsen affordability and access for medical users. The Senate passed the measure 19–17 amid bipartisan budget negotiations; opponents say it circumvents voter intent from 2018, may overstate revenue by ignoring lost sales, and expect legal challenges. Patient surveys and regional data showing growing dissatisfaction with high prices and program costs have heightened concerns the tax will further harm access and the legal market.