All about Michigan's new marijuana tax
As many cannabis enthusiasts already know, Michigan will be adopting a 24% tax on wholesale cannabis in 2026. Governor Gretchen Whitmer signed the legislation on Oct. 7, 2025, and it is set to take effect on Jan. 1.
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How does the tax work?
The 24% wholesale tax applies to marijuana sales from growers and processors to retailers. Customers will not see an increase in taxes on their purchases. Michigan shoppers are still responsible for the existing 10% excise tax on retail marijuana sales, along with Michigan’s 6% sales tax.
While the 24% isn’t on your receipt, you may feel the total impact on your final price.
What does the tax mean for cannabis prices?
After years of declining prices, Michigan has some of the lowest weed prices in the country. While costs are expected to rise due to the new wholesale tax, The Fire Station is taking a thoughtful approach to offsetting these. This includes working closely with our suppliers to secure the best pricing possible and evaluating efficiencies across our operations. While customers may see some price adjustments, we don’t anticipate an across-the-board 24% increase. Our goal is to protect affordability and accessibility while continuing to provide the quality and service our customers expect.
Will Medical Marijuana Prices Be Affected?
The new 24% wholesale tax applies only to adult-use (recreational) marijuana products. Medical marijuana sales are exempt from this new tax.
What will the tax revenue be used for?
The tax is projected to raise approximately $420 million a year, which will be dedicated to funding Governor Whitmer’s $1.8 billion road plan.
“When I took office, I made a promise to fix the damn roads so Michiganders could get where they’re going faster and safer,” Whitmer said in a video statement after the Michigan budget passed.
Will My Favorite Small Growers Go Out of Business?
Analysts and advocates warn that the combination of the wholesale tax and low market prices could put smaller industry players out of business, leading to consolidation and job losses. These are predictions, and not certainties. The Fire Station encourages customers to continue to support small, local operators throughout 2026 so they can weather these challenges.
What is the Industry's Response?
The Michigan cannabis industry strongly opposes the new tax. The Michigan Cannabis Industry Association (MiCIA), the state’s leading cannabis trade group, filed a lawsuit shortly after the budget passed, seeking to block the tax.
When recreational marijuana was legalized in 2018, Michigan voters approved a 10% excise tax on retail cannabis sales, allocating 30% of the revenue to local and county governments, 35% to schools, and 35% to road and bridge projects.
Under the state constitution, voter-approved policy can only be changed by public vote or if ¾ of the lawmakers in the House and Senate support the change.
The 24% new tax didn’t get three-fourths support in the House or Senate. In the Senate, only 19 of the 37 lawmakers supported it, according to MiCIA.
Hundreds of cannabis advocates gathered at the Michigan State Capitol on Sept. 30 to protest the legislation before the budget was finalized.
Only time will tell if these legal actions will have an impact on the new wholesale tax.
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The Fire Station has several retail locations across Michigan’s Upper Peninsula, with more coming soon.
