Written by Pull up a chair in The Green Room, because Lansing is talking taxes again — and this time the conversation could change what legal cannabis costs in Michigan. A state lawmaker wants to put the state’s 24 percent wholesale cannabis tax on pause for a full year, arguing it is raising far less money than promised while squeezing the very businesses that followed the rules to get licensed.
Some background, poured neat. The wholesale tax took effect at the start of 2026 as part of a road-funding package meant to pay for repairs to roads and bridges, according to Cannabis Business Times. It sits on top of the taxes shoppers already know: a 10 percent excise tax at the register and the state’s 6 percent sales tax. Supporters sold it as a way to fix the roads without raiding schools. Critics warned from the beginning that Michigan shops were already competing on razor-thin margins.
The numbers are why this is back in the news this week. State budget figures cited by both Cannabis Business Times and MITechNews put collections at about $73.4 million through the first part of 2026 — well short of the roughly $420.7 million a year that early estimates projected. In other words, the tax is not delivering the road money it was supposed to deliver, at least not at the pace lawmakers expected.
That shortfall is the heart of the new proposal. Rep. Jay DeBoyer announced on October 22 that he plans to introduce legislation suspending the wholesale tax for 12 months, so lawmakers can reevaluate whether it is working, according to MITechNews. He called the tax ineffective and punitive, and argued it pushes buyers toward unlicensed sellers while licensed owners try to compete fairly. A separate bipartisan bill, Senate Bill 810, would repeal the tax outright, but it has sat in committee since February without a hearing, according to Cannabis Business Times.
The pressure on shops is real, and it did not start with this tax. Michigan’s legal market did about $3.2 billion in sales in 2025, down slightly from $3.3 billion in 2024, and the average price of an ounce has fallen to around $60, according to state Cannabis Regulatory Agency figures reported by MITechNews. That is good news for a shopper’s wallet and hard news for growers and stores. At least one operator closed several locations this summer and pointed to the new tax as part of an unsustainable picture, according to Cannabis Business Times.
Politics, as always, has a seat at the table. The tax debate has landed in the governor’s race ahead of the November 3 election. Republican nominee John James has pledged to repeal or sharply reduce the wholesale tax if elected, and the Michigan Cannabis Industry Association has endorsed him, calling him the clear choice for the industry, according to Cannabis Business Times. Democratic nominee Jocelyn Benson has taken a more cautious line, saying leaders need clearer data on collections and impact before changing course, according to MITechNews. Polls reported this week still show Benson leading.
For Detroit, this is not abstract. Our city built its adult-use program carefully, with Detroit Legacy owners at the center, and those are exactly the kind of independent businesses with the least cushion when a wholesale cost rises. If a pause passes, shops could get breathing room and legal prices could stay competitive. If it does not, the trade-off remains on the table: road money on one side, and the health of a legal market voters approved in 2018 on the other. Either way, The Green Room will be watching — talked about properly, with the facts on the table.
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What do you think — should Michigan pause the tax, repeal it, or keep it for the roads? Pull up a chair and tell us in the comments.