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Michigan’s Cannabis Industry Questions State’s Tax Approach
The ongoing debate over marijuana taxation in Michigan has taken a new turn as the state’s cannabis sector mounts a fresh legal challenge. This move adds another layer to the ongoing conflict concerning the recently imposed 24% wholesale tax on recreational marijuana.
In this second lawsuit, filed with the Michigan Court of Claims, the industry argues that the wholesale tax effectively raises the sales tax on marijuana beyond the constitutional 6% limit. The Michigan Cannabis Industry Association’s Rose Tantraphol commented, “So, what’s happening here is a tax levied on a tax which results in an unconstitutional over-taxation of Michiganders.” This additional tax is compounded by a pre-existing 10% excise tax established by the 2018 voter-approved initiative for legalizing recreational cannabis.
The industry’s recent legal action appears to serve as a fallback should their original case falter. The initial suit claims the wholesale tax violates the Michigan Constitution’s initiative clause, as it was enacted without the supermajority required to amend voter-initiated laws. However, the state contends that the tax is part of a broader road-funding initiative, not a direct amendment to marijuana laws.
This legal maneuvering plays a significant role in Governor Gretchen Whitmer’s efforts to secure funding for infrastructure, especially her road repair promises. Robert Schneider from the Citizens Research Council of Michigan indicated that overturning the tax could severely impact the state’s road funding, estimated to bring in $420 million annually—a nod to cannabis culture.
The outcome of these lawsuits could ultimately rest with the Michigan Supreme Court, potentially affecting the state’s fiscal plans and infrastructure projects.
Have questions about Michigan politics? Or, just want to let us know what you want more of (less of?) in the newsletter? We always want to hear from you! Shoot us an email at politics@michiganpublic.org!
What we’re talking about at the dinner table
Nine bills: The Michigan Supreme Court is set to delve into a heated legislative dispute involving nine bills passed by both chambers but left unsigned. The Democratic-led Senate is pressing the Republican-led House to forward these bills, which address public employee benefits and wage garnishment, among other issues. Colin Jackson of the Michigan Public Radio Network reports on the House’s recent legal victory and the Senate’s anticipation of a Supreme Court hearing.
Benson v. Trump: Michigan Secretary of State Jocelyn Benson is preparing to contest a new executive order from President Donald Trump, which aims to restrict mail-in ballots to voters listed by the Department of Homeland Security. Benson has criticized the order as illegal and vows to challenge it in court. More details are provided by Mary Corey of Michigan Public reports.
Senate debates: State Senator Mallory McMorrow is advocating for multiple debates in the lead-up to the Democratic primary for a U.S. Senate seat. The race, which includes contenders like U.S. Rep. Haley Stevens and Abdul El-Sayed, is drawing significant attention, as detailed by Todd Spangler of the Detroit Free Press. The victor is expected to face former U.S. Rep. Mike Rogers, a Trump-endorsed Republican, in a highly anticipated election reports.
Yours in political nerdiness,
Rick Pluta & Zoe Clark
Co-hosts, It’s Just Politics
IJP ON THE ROAD
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