Michigan Judge Denies Bid to Toss Lawsuit Against New Wholesale Cannabis Tax

Michigan Court of Claims Judge Sima G. Patel this week denied a request by state attorneys to rehear a motion to dismiss a lawsuit against the state’s new 24% cannabis wholesale tax, Michigan Advance reports.

The lawsuit, filed in October by the Michigan Cannabis Industry Association, claims the wholesale tax is an unconstitutional update to the state’s voter-approved adult-use cannabis policy. Patel denied the plaintiffs’ request to block the January 1 rollout of the new tax, but is also choosing to let the lawsuit play out in the courts, despite the state’s motion to dismiss.

Patel wrote in her judgment on Monday that, “It is not certain on this record whether the 24% wholesale excise tax will impact prices to the extent purchasers will be driven to the illicit marijuana market,” and that “discovery is required” to determine how the new tax will impact the voter-approved cannabis reforms.

“In issuing this order, the court recognizes the serious questions about whether this discriminatory tax violates the intent of the cannabis legalization that Michigan voters approved in 2018. We’re looking forward to making our case that this tax will push Michiganders, who are already feeling stretched financially, into the illicit market.” — Rose Tantraphol, Michigan Cannabis Industry Association spokesperson, via Michigan Advance

Lawmakers approved the tax in October as part of a road-funding plan. State attorneys say the policy did not alter the language of the voter-approved cannabis law.

The voter-approved law only included a 10% excise tax on cannabis.