Cannabis Association Files Suit Over ‘Unconstitutional Tax Scheme’

(Source: MIRS.news, Published 10/07/2025) The Michigan Cannabis Industry Association (MCIA) kept its promise and filed a lawsuit Tuesday against the state, alleging the 24 percent wholesale tax on cannabis is unconstitutional.

The lawsuit, filed in the Court of Claims against the Department of Treasury and Treasurer Rachael Eubanks, alleges the Legislature acted unconstitutionally in passing the tax, which Gov. Gretchen Whitmer signed into law today.

“Notably, Article 2 Section 9 of the Michigan Constitution requires a three-quarters vote, rather than a simple majority vote, to amend any law enacted by citizen initiative, as was the Michigan Regulation and Taxation of Marihuana Act, which passed on the 2018 election ballot,” said MCIA spokesperson Matt Friedman in a statement Tuesday.

“The lawsuit details how the last-minute, late-night process occurred in violation of a range of other constitutional provisions,” he said. “The Association is asking the Court to strike the tax in its entirety.”

The budget legislation, approved after the state’s constitutional Oct. 1 deadline, included about $1.1 billion in additional monies for roads, and under the budget compromise, an excise tax “on the wholesale price of the sale or other transfer of marihuana” was included.

The MCIA’s brief argues that the Michigan Regulation and Taxation of Marihuana Act is the “exclusive means” to impose an excise tax on marijuana – not the Comprehensive Road Funding Tax (CRFT) included in the Fiscal Year 2025-26 budget.

The plaintiffs argue that they will be harmed by the “unlawful excise tax” and that implementation will threaten immediate insolvency of some members.