A Michigan Court of Claims judge has declined to temporarily block a new 24 percent wholesale tax on marijuana, delivering an early setback to cannabis industry groups that argue the levy is unconstitutional and harmful to licensed businesses.
In an opinion issued Monday, Judge Sima Patel denied a request for a preliminary injunction in the consolidated case brought by Holistic Research Group Inc. and other industry advocates against the Michigan Department of Treasury. The ruling allows the tax—approved by lawmakers in October as part of a broader 2025–26 state budget package—to move forward while the legal challenge proceeds.
The tax is designed to generate new revenue for long-term road repairs and infrastructure projects through 2030. Cannabis businesses argued that the measure violates the Michigan Constitution’s “title-object” clause, which requires that laws focus on a single main subject. They also claimed that Michigan’s voter-approved marijuana law provided the exclusive method for taxing cannabis, limiting the Legislature’s ability to add new levies.
Patel rejected those arguments at this early stage, finding that the plaintiffs failed to show a strong likelihood of success on the merits or prove that they would suffer irreparable harm without immediate court intervention.
In her opinion, Patel said the voter-initiated marijuana statute clearly contemplated additional forms of taxation beyond the existing 10 percent excise tax. She noted that the law’s language stating the excise tax applied in addition to “all other taxes” was intentionally broad and did not restrict lawmakers to only generally applicable taxes, such as the state’s 6 percent sales tax.
“The two statutes can be read together,” Patel wrote, emphasizing that the Legislature did not amend or replace existing cannabis taxes but instead created a new, separate wholesale tax. That approach, she said, is permitted under the state’s marijuana regulatory framework.
While the preliminary injunction was denied, the case is not over. Patel allowed the lawsuit to continue on a narrower question: whether the new tax interferes with the original intent of the voter-approved law legalizing and regulating marijuana.
That issue, the judge said, raises factual questions that cannot be resolved without additional evidence. The case will proceed to discovery, where both sides will gather information about how the new tax may affect the goals of Michigan’s cannabis legalization framework.
Read the whole article from Marijuanamoment here.
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