Cannabis tax cuts proposed in two states

Michigan’s cannabis industry is rallying behind a push to repeal the recently implemented 24% wholesale tax.

The unprecedented tax hike, passed during state budget negotiations in October and imposed Jan. 1, has already crashed legal sales in Michigan, state data shows.

Marijuana retailers reported a 16% drop in business last month, with many operators struggling to stay afloat, Robin Schneider, director of the Michigan Cannabis Industry Association, told business publication Moody on the Market.

“It’s pretty bad,” Schneider said. “We’re already seeing facility closures.”

Michigan cannabis industry hopeful for tax repeal

Republican state Sen. Jonathan Lindsey, who introduced the tax repeal bill in the state Legislature, said the tax is an unnecessary government overreach that will fail to generate the projected $420 million in road funding.

“The state is never going to get their projected $420 million for road funding because [the industry] isn’t going to exist anymore,” Lindsey told Moody. “And that’s what happens with the government singles out one industry and overtaxes them.”

Annual cannabis sales hit a record $3.17 billion in Michigan in 2025 amid price compression.

Alaska considers cannabis cultivation tax repeal

In Alaska, there are several efforts afoot to overhaul the state’s cannabis cultivation tax, one of the highest in the nation, according to the Anchorage Daily News.

House Bill 91, introduced by state Rep. Ashley Carrick, would replace to replace the state’s flat $50-per-ounce cultivation tax with a 6% tax paid by consumers, the newspaper reported.

A separate bill proposed by Democratic state Sen. Matt Claman would slash the tax from $50 per ounce to $12 per ounce, the newspaper reported.

In Alaska, cannabis taxes are paid by cultivators – whether or not the product ultimately sells.

Tax rates are:

• $50 per ounce of flower
• $25 per ounce of immature flower
• $15 per ounce of trim

State advocates say a cut is necessary to rescue an industry that’s been in steady decline.

“We believe these challenges are threats existential to Alaska’s regulated cannabis industry, and without tax relief, the regulated market will continue to get replaced by the unregulated illicit market,” Lacy Wilcox, vice president of the Alaska Marijuana Industry Association, said during a hearing last month, the Daily News reported.