Michigan’s new 24% wholesale tax on marijuana generated nearly $34 million through April 30 – far below the roughly $105 million projected for a single quarter, according to a state Treasury report.
The tax, which took effect Jan. 1, was at the center of a bipartisan road-funding deal that ended a drawn-out budget standoff last year.
The nearly $34 million collected is less than 33% of the quarterly target.
Most of the money is supposed to flow into a new Neighborhood Road Fund for local roads and bridges, with a smaller piece going to a Comprehensive Road Funding Fund.
What are the numbers behind the gap?
The nonpartisan House Fiscal Agency had pegged the tax at about $420 million a year when the Legislature passed it in October.
Michigan adult-use cannabis sales reported to the Cannabis Regulatory Agency came in below year-ago levels every month from January through April.
The year-over-year comparison shows monthly sales were:
- January: $226.4 million in 2026, down from $246.5 million in 2025
- February: $225.1 million in 2026, down from $241.3 million in 2025
- March: $255.1 million in 2026, down from $276.3 million in 2025
- April: $258.2 million in 2026, down from $270 million in 2025
Did the cannabis industry predict the drop?
The Michigan Cannabis Industry Association, which opposed the tax before it passed, said the numbers prove its point: If you pile a wholesale tax on top of the existing 10% excise tax and 6% sales tax, you shrink the legal market and push buyers toward illegal sellers.
“Our elected leaders made the cannabis industry a sacrificial lamb in order to have the illusion of a road funding fix,” Robin Schneider, the association’s executive director, told The Detroit News.
“In reality, the only thing they have accomplished is the decimation of a strong industry that served as an economic driver for this state. The result is business closures, jobs lost and tax revenue taken away from local governments.”
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The association sued last year to block the tax, arguing the Legislature changed the 2018 voter-approved marijuana law without the required three-fourths supermajority. A Court of Claims judge declined to halt the tax in December, and the case is headed to trial.
Meanwhile, Gov. Gretchen Whitmer’s administration has released only a heavily redacted version of a Cannabis Regulatory Agency memo on the tax’s likely effects, according to WLNS.
