Local dispensaries concerned over proposed 32% marijuana tax

Michigan dispensary owners are voicing concerns over a proposed 32% wholesale tax on marijuana, which Gov. Gretchen Whitmer says would generate $470 million annually for road improvements.

Whitmer introduced the plan earlier this month as part of her proposed $3 billion “Mi Road Ahead” infrastructure initiative. In a statement, her office described the proposal as “fiscally responsible and balanced.” The governor also noted that Michigan’s marijuana tax is currently the fourth-lowest in the nation, fueling rapid growth in the industry.

While there is no existing wholesale tax on marijuana, the proposed increase would be in addition to the 10% excise tax on recreational marijuana, which consumers already pay on top of the state’s 6% sales tax. The wholesale tax would directly impact growers, with costs likely being passed down to retailers and consumers.

“Every product we buy wholesale will have an added tax that we’ll have to pass through to the customer, just like we already do with sales and excise taxes,” said Mara Kore, general manager of Confluence, a dispensary in Three Rivers. “That’s definitely a burden on customers who will end up paying for it.”

Kore noted the marijuana industry is already struggling due to oversupply, leading to declining revenues. She fears the proposed tax would worsen that trend.

According to the Michigan Cannabis Regulatory Agency, the state now has 850 marijuana retailers — nearly doubling the 432 that existed in 2021. As supply has increased, prices have dropped significantly, with the average cost of an ounce falling from $204 in 2021 to $74 in 2024.

Watershed Voice reached out to Whitmer’s office for comment on the tax’s potential impact on small businesses but did not receive a response before publication.

Despite concerns, Kore remains hopeful the tax proposal will not pass, as it requires a two-thirds majority vote in the Legislature.

“We’re on the fence about how to approach this,” she said. “From what I’ve read, it’s unlikely to pass. At this point, I’m assuming it won’t, and like everything in this industry, we’ll just have to adapt.”

Najifa Farhat is a staff reporter for Watershed Voice.