A judge has declined a request to stop Michigan’s new 24% wholesale tax on marijuana.
Michigan Court of Claims Judge Sima G. Patel denied motions filed by Holistic Research Group and Michigan Cannabis Industry Association (MCIA) and PF Manufacturing, LLC., for a preliminary injunction on the state’s new 24% wholesale excise tax on marijuana sales.
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You can view the ruling in the court document included at the end of this article.
The tax was enacted as part of the Comprehensive Road Funding Tax Act (CRFTA), which imposes a 24% excise tax on wholesale marijuana transactions to fund road construction and maintenance in Michigan.
The court ruled that the plaintiffs failed to demonstrate a likelihood of success on the merits of their claims.
The plaintiffs argued that the tax violated the Michigan Regulation and Taxation of Marihuana Act (MRTMA), a voter-passed initiative, and that the CRFTA was an unconstitutional indirect amendment to it.
They also contended the tax violated the Michigan Constitution’s Title-Object Clause, which requires laws to have a single object expressed in their title.
However, Patel found that the CRFTA did not amend the MRTMA but imposed a separate tax, consistent with the MRTMA’s language allowing “all other taxes.”
“According to the plain meaning of these terms, ‘all other taxes’ broadly means all taxes other than the tax imposed by MCL 333.27963(1),” the judge said in the opinion.
The court also addressed concerns about whether the 24% wholesale excise tax conflicted with the purposes of the MRTMA, which set a 10% excise tax on retail marijuana sales to keep prices reasonable and reduce the illicit market.
MCIA Executive Director Robin Schneider, who helped draft the MRTMA, said the 10% retail tax was chosen to “draw individuals from the illicit market into the regulated system.”
She warned the new tax would make Michigan’s tax rate “one of the highest in the nation,” risking a return to the illicit market.
Other affidavits from industry leaders described razor-thin profit margins and predicted many businesses could close due to the tax.
However, the court noted these harms were speculative and that legal marijuana products offer safety and variety not found in illicit markets.
“This is not a legal issue, but a question of fact,” according to the document. “The Court must consider the intentions of the MRTMA drafters and the impact of the new wholesale excise tax on the purposes of the MRTMA. The Court may not resolve such factual questions at the summary disposition phase. Discovery will be required to develop the evidence needed to support the parties’ positions in this regard.”
Regarding the Title-Object Clause challenge, the court ruled that the CRFTA’s purpose to fund roads through taxation was germane to the original bill introduced.
The court cited precedent stating, “Where the changes fall within the general purpose of the original bill, or are extensions of it, the Court has termed them germane.”
The court rejected the plaintiffs’ reliance on Anderson v Oakland Co Clerk, noting that, unlike that case, the CRFTA’s amendments were not a complete replacement of the bill’s purpose but an extension.
Plaintiffs also raised federal constitutional claims, including violations of due process, equal protection, the Contracts Clause, and the Commerce Clause. The court found these claims lacked sufficient merit to justify injunctive relief.
The court emphasized the importance of funding road construction and maintenance in Michigan and found plaintiffs had not shown they would suffer greater harm without an injunction than the public would if the tax were delayed.
Judge Patel ordered the parties to appear for a scheduling conference to proceed toward trial on Jan. 13, 2026.
(This ruling is not a final resolution of all issues in the case.)