Takeaways

  • Michigan’s new 24% wholesale cannabis tax is in effect on January 1; however, Treasury’s last-minute guidance raises significant compliance, pricing, and litigation risks for licensees.
  • Treasury’s use of a blanket “average wholesale price” based on assumed markups—not actual transaction data—may conflict with statutory and constitutional requirements.
  • With constitutional challenges pending and more litigation expected, cannabis businesses should prepare now for audits, disputes, and rapidly evolving enforcement positions.

As the new year is upon us, Michigan’s wholesale cannabis tax takes effect on January 1. A mere 35 hours beforehand, Michigan’s Department of Treasury published the “average wholesale price” to be used for affiliate transfers and updated its FAQ’s. Treasury has also prepared a draft Revenue Advisory Bulletin—although Treasury has not made this public on their wholesale marijuana tax webpage.Continue Reading January 1 for Michigan Cannabis: A New Year, A New Headache

Takeaways

  • President Trump’s executive order significantly accelerates the long-stalled federal process to reschedule marijuana to Schedule III.
  • Rescheduling could eliminate Internal Revenue Code Section 280E, fundamentally changing the tax economics of cannabis businesses.
  • A move to Schedule III could unlock new federal opportunities, including potential access to trademark protections previously unavailable to cannabis operators.

On December 18, 2025, President Trump signed an executive order to fast-track the reclassification of marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA). Schedule I is the most restrictive classification under the CSA and is reserved for drugs with no currently accepted medical use and a high potential for abuse. Other Schedule I drugs include heroin, LSD, and ecstasy. By contrast, Schedule III drugs are those with a moderate to low potential for physical and psychological dependence, such as Tylenol with codeine. The gravity of this decision and its impact on the cannabis industry cannot be overstated.Continue Reading President Trump Signs Executive Order To Reschedule Marijuana To Schedule III: Quick Takeaways for Cannabis Operators

While the constitutionality of Michigan’s new marijuana wholesale tax is being reviewed by the Michigan Court of Claims, the Michigan Department of Treasury has released what Treasury is calling “preliminary information” and FAQs about the administration of the tax. (Disclosure: Dykema is co-counsel with Honigman Miller for the Michigan Cannabis Industry Association’s challenge to the tax.) Those FAQs include reassurances about some industry concerns with the tax, and state that even though the tax takes effect January 1, 2026, it won’t be collected until January 15, 2027. Unfortunately, Treasury’s “preliminary information” is not only essentially meaningless, but it also demonstrates that Treasury is just making things up as it goes along.Continue Reading Fool’s Gold: Michigan Treasury Announces Illusory Reprieve on Marijuana Wholesale Tax

At 3:00 a.m. on October 3, 2025, Michigan’s Legislature passed a 24% wholesale tax on legal marijuana sales, without hearing a single second of testimony and just eight days after the bill’s language was made public (the tax is the subject of multiple other posts here on the Cannabis Law Blog). Unless blocked by the courts or repealed, the tax will take effect on January 1, 2026.Continue Reading Michigan Cannabis Tax Passes: Numbers

Takeaways

  • The law would tax a tax, creating a spiraling effect that significantly increases costs for growers, retailers, and consumers.
  • New rules would effectively force cash-on-delivery sales, putting financial strain on retailers who can’t access immediate capital.
  • Independent, family-owned, and social equity businesses are at higher risk of failure under the proposed tax model.

After failing to enact annual appropriations bills by the start of the new fiscal year, Michigan legislators have taken the unprecedented step of passing a short continuation budget. Nevertheless, legislative leaders and the governor are trying to keep a new 24% wholesale tax on marijuana. It hasn’t passed yet, and legal challenges are certain, but it’s worth taking a look to see the damage that will be done if the tax does go into effect.Continue Reading The Real Impact of Michigan’s New Wholesale Marijuana Tax