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Tag: Gov. Whitmer

  • Michigan’s cannabis market shrinks as new tax threatens more closures, layoffs – Detroit Metro Times

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    Michigan’s cannabis industry is facing a sobering reckoning in 2026 that could have lasting ramifications for legal weed. 

    Since recreational cannabis sales began in December 2019, prices have plummeted, more than 550 dispensaries and cultivators have closed, and thousands of employees have been laid off.  

    And for the first time, the recreational market saw a decline in annual sales, according to new figures released by the Michigan Cannabis Regulatory Agency (CRA). Adult-use dispensaries rang up $3.17 billion in sales in 2025, down from $3.27 billion in 2024, a decline of about $100 million, or 3.1%. 

    Prior to 2025, year-over-year growth helped turn Michigan into one of the nation’s largest legal cannabis markets. But beneath that growth was an industry struggling with declining prices from an oversaturated supply. 

    The dream of a green rush, it turns out, has given way to a cutthroat market where most businesses are fighting to survive. 

    During the six years of recreational sales, the industry has generated a remarkable $13.23 billion in purchases and $2.2 billion in state and excise taxes that go to local governments, schools, and roads. 

    But those figures are expected to continue falling this year.

    Despite the mounting problems facing the industry, Gov. Gretchen Whitmer and state lawmakers approved a measure late last year to impose a 24% wholesale tax on cannabis in 2026. Desperate to deliver on her aging pledge to “fix the damn roads,” Whitmer teamed up with the state House to sneak in the tax proposal before the industry and consumers could respond. 

    Whitmer signed the bill in October, nearly two weeks after the Michigan Department of Treasury estimated the new tax will shrink the wholesale market by 14%, according to records obtained by Metro Times. In other words, the state anticipates that its wholesale tax will chase away customers and cause a significant decline in excise and sales tax revenue. 

    Meanwhile, legislators have not touched the 4% liquor tax since it was set in 1985. That may be because the liquor industry has one of the most powerful lobbies and has donated heavily to Whitmer and other lawmakers.

    “They took advantage of a fledgling industry that isn’t organized, and they did it without any public discussion and punched it through,” Stuart Carter, who owns Detroit dispensary Utopia Gardens and a cultivation facility, tells Metro Times. “Now everyone is scrambling to figure out what to do.”

    Carter and other business owners say the new tax will deepen the downturn, forcing more dispensaries, processors, and cultivators to close and giving an upper hand to the larger corporate retailers and grow operations that provide mediocre product. 

    “The multi-chain operators are in the best position to weather this because they are buying in bulk and they can diffuse losses at some of their stores,” Carter says. “It’s the smaller entrepreneurs who are going to be the most affected.”

    Tom Farrell, owner of the Refinery dispensaries in New Buffalo and Kalamazoo and Growing Pains, a cultivator, says the tax is already taking a toll on the industry. He says sales at his New Buffalo dispensary “have been very, very slow,” in part because many consumers mistakenly believe they are responsible for paying the 24% wholesale tax beginning on Jan. 1. 

    “It’s slower than it has ever been,” Farrell says, adding that the same store saw record sales in December. 

    Dispensaries stocked up on a lot of weed in December to avoid the tax’s impact. While growers and processors are legally responsible for paying the tax, their options for recouping at least a portion of the extra costs are limited to raising prices or negotiating with dispensaries to absorb some of the increase. In an industry already hanging on by razor-thin margins, those costs are likely to raise prices for consumers, many of whom are already squeezed by inflation and other rising prices.  

    “There isn’t that much action in early 2026,” Brian Farah, CEO of Hello Farms in Au Gres Township, says. “Everyone bought up in anticipation of the tax.”

    Farah isn’t optimistic about this year, saying “2026 is set to be even worse than 2025.” 

    “We always look out for the Michigan consumer by offering a quality product, but it’s becoming more and more challenging because sales numbers are starting to decline,” Farah says.  

    Even before the wholesale tax, the industry has been struggling. Prices are a major factor. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier, and $95.08 in December 2023, according to CRA data. The state has become one of the cheapest legal cannabis markets in the country, which is a win for consumers, but it’s a tough reality for businesses trying to stay afloat.

    By the end of 2025, Michigan had 2,171 active cannabis licenses, down 85 from the prior year, marking the first year-over-year decline in active licenses since adult-use began. The CRA’s licensing records show 940 licenses are no longer active. 

    Pleasantrees has a cannabis grow operation in Mount Clemens. Credit: Steve Neavling

    Growers are feeling the pressure the most. Michigan currently has 430 active grow operations, but 191 have closed since the industry began. That means about 30.8% of growers have gone out of business over the past six years. 

    In Detroit, at least 14 cannabis businesses have closed since the city began issuing licenses in late 2022.

    Even with the closures, the market is still crowded. New growers and processors continue to enter the industry nearly as fast as those leaving it. Cannabis operators say oversupply is going to continue to eat away at the industry this year. 

    “There is way too much supply. There’s too much product,” Farrell says. 

    As an example of how bad it has gotten, Farrell points to one brand that is making just a 25-cent profit off of a vape cartridge. 

    Whitmer’s office won’t responds to Metro Times’s questions about the cannabis industry or how the wholesale tax is impacting the market. Instead, they referred us to the CRA, which had nothing to do with the tax and isn’t implementing it.

    CRA spokesman David Harns says changes in a new industry are normal and are similar to the challenges facing other cannabis markets.

    “Since legalization, Michigan’s cannabis industry has experienced significant growth, making the state one of the top producers in the country,” Harns says. “As the market continues to mature, fluctuations in supply and demand are expected and consistent with patterns seen in other states that legalized earlier.”

    After voting in favor of the wholesale tax, the state Senate introduced a set of bills on Oct. 2 that would limit competition in hopes of reducing the oversupply. 

    Senate Bill 597, introduced by Sens. Sam Singh, D-East Lansing, and Jeremy Moss, D-Southfield, would limit each municipality to one dispensary for every 10,000 residents. If approved, the legislation would prevent the CRA from approving new dispensary licenses in municipalities that already exceed the limit. Municipalities with fewer than 10,000 residents would be limited to one retail license. 

    While many in the industry support the legislation, it threatens smaller cities like Hazel Park (pop. 19,431), Ferndale (pop. 19,431), and Inkster (pop. 25,108), which have become cannabis hubs and rely on the tax revenue. Hazel Park has nine dispensaries, Ferndale has six, and Inkster has seven, according to CRA records. The new legislation would limit Hazel Park and Ferndale to one dispensary each and Inkster to two. 

    The legislation wouldn’t force existing dispensaries to close, but once one shuts down, it can’t be replaced until the number of retailers fall below the proposed cap.

    For cannabis workers, this is a nerve-racking year. Michigan’s regulated cannabis industry remains a major employer, with 41,248 workers counted in December 2025. Those jobs include dispensary employees, cultivation and processing staff, delivery drivers, compliance specialists, security teams, and others. 

    “People are really scared,” Farrell says. “I have employees asking me if they are going to still have a job.”

    Municipal budgets are also at risk. Michigan shares adult-use cannabis excise tax revenue with communities that allow dispensaries and other cannabis marijuana businesses to operate, and the payments have become an important revenue stream in those cash-strapped cities and townships. In fiscal year 2024, Michigan distributed nearly $100 million to communities, with each eligible municipality, county, and tribe receiving more than $58,200 per licensed retail store and microbusiness within its borders. 

    If more retailers shut down and sales weaken, local distributions will shrink.

    “The state is going to lose excise and sales taxes because of the wholesale tax,” Stewart says. 

    As frustration grows over the legal industry, business owners are worried more consumers will go back to an illicit market that doesn’t face steep tax rates. If that happens, operators say, the legal market will continue to shrink, and the state will have less revenue in the future. 

    For now, dispensaries, growers, processors, and other cannabis businesses will have to find a way to adapt, and it won’t be easy. 

    “We want to have a sustainable Michigan business that gives back to the customers,” Farah says. “But with these changes, it will be difficult to navigate these waters.”


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    Steve Neavling

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  • Cannabis trade group sues Michigan over new 24% wholesale tax – Detroit Metro Times

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    The state’s largest cannabis trade group has filed a lawsuit against Michigan, arguing that a new 24% wholesale tax on marijuana is unconstitutional and will devastate a legal market already struggling from plummeting prices and numerous closures.

    The Michigan Cannabis Industry Association (MCIA) filed the complaint Tuesday in the Michigan Court of Claims, just hours after Gov. Gretchen Whitmer signed the tax into law as part of the new state budget. The Senate approved the measure 19-17 last week after it passed the House 78-21.

    The lawsuit argues lawmakers lacked the three-quarters supermajority required to change voter-approved cannabis laws under the Michigan Constitution. When voters legalized recreational marijuana in 2018, they approved a 10% excise tax and 6% sales tax on retail cannabis sales. Any new or higher tax, the MCIA contends, amounts to an amendment of that ballot measure and therefore needs a supermajority vote.

    The lawsuit argues that lawmakers violated the constitutional protections that voters included in the 2018 ballot initiative that legalized recreational marijuana. The complaint adds that the new wholesale tax amounts to an additional excise tax under a different name. 

    “Legislative authority over marihuana excise taxes is exclusive to MRTMA; no other statute may intrude upon or duplicate the marihuana excise tax,” the lawsuit states. “Thus, additional excise taxes require a direct amendment to MRTMA itself.”

    Under the new law, the 24% tax will be levied on all marijuana sold or transferred to retailers beginning Jan. 1. The Whitmer administration projects it will raise roughly $420 million a year to fund road repairs.

    Cannabis businesses say the tax will drive up prices, fuel the illicit market, and force more licensed operators out of business.

    “This is going to be a nail in the coffin, especially for mom and pops,” said Tom Farrell, owner of the Refinery dispensaries in New Buffalo and Kalamazoo and Growing Pains, a cultivator. “The industry is in turmoil right now.”

    At Farrell’s Kalamazoo location, sales have dropped 70% in the past 18 months. 

    “It has been horrendous,” he said. “We had to lay off employees.”

    The MCIA’s lawsuit also accuses lawmakers of misleading the public by inserting the tax into a road-funding bill at the last minute. In addition the complaint alleges the measure unconstitutionally interferes with existing contracts between cannabis suppliers and retailers by taxing discounts and rebates that are already part of negotiated agreements.

    State leaders, including Whitmer and House Speaker Matt Hall, maintain that the tax is legal because it does not alter the existing excise tax structure approved by voters.

    Cannabis business owners and advocates strongly disagree. They argue the new tax undermines the intent of the 2018 legalization measure, which was designed to keep taxes low enough to compete with the unregulated market.

    “It’s a slap in the face to the cannabis industry and voters,” said Nick Hannawa, partner and chief legal counsel of Puff Cannabis, which operates 11 dispensaries. “It’s totally unfair to a struggling industry. We are already taxed more harshly than any other industry in the country.”

    Michigan’s cannabis market has already been reeling from oversupply, falling prices, and shrinking profit margins. In August, the average retail price of recreational flower dropped to a record low of $61.79 an ounce, which is down from $512 when legal sales began in 2020.

    Industry leaders warn that adding a 24% wholesale tax will push Michigan’s legal cannabis prices close to those in California, where high taxes eroded parts of the legal market and drove consumers back underground.

    In the same week the Michigan House approved the wholesale tax, California Gov. Gavin Newsom signed a bill to roll back a 25% tax increase on recreational cannabis. He approved the measure because the state’s high tax rates have forced thousands of legal businesses to shut down and drove residents to the unregulated market.

    The MCIA is seeking a preliminary injunction to block enforcement of the tax while the case moves forward.


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    Steve Neavling

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  • Whitmer’s 24% cannabis tax plan alarms struggling industry – Detroit Metro Times

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    Michigan’s cannabis industry is already struggling from plunging prices, layoffs, and shuttered dispensaries and cultivators. 

    Now Gov. Gretchen Whitmer is pushing a whopping 24% wholesale tax on marijuana products that business owners warn will accelerate closures and drive customers to the illicit market. 

    With little to no warning to the cannabis industry or its consumers, the state House on Thursday voted 78-21 to approve the tax, which is projected to raise $420 million a year. But industry leaders say that estimate ignores the inevitable loss in revenue from losing customers, dispensaries, and cultivators. 

    The tax hike was a bipartisan effort, with 10 Republicans and 11 Democrats voting against it. 

    As early as Tuesday, the state Senate will take up the bill, and some cannabis business leaders are in Lansing on Monday to urge senators to vote against the tax. They are also planning to protest outside the state Capitol on Tuesday.

    “This is going to be a nail in the coffin, especially for mom and pops,” says Tom Farrell, owner of the Refinery dispensaries in New Buffalo and Kalamazoo and Growing Pains, a cultivator. “The industry is in turmoil right now.”

    At his Refinery location in Kalamazoo, sales are down 70% over the past 18 months, he says.  

    “It has been horrendous,” Farrell tells Metro Times. “We had to lay off employees.” 

    Michigan’s recreational market is already taxed more than any industry in the state. Cannabis consumers pay a 10% excise tax and a 6% sales tax.  

    If approved, the tax increase will drive people to the illicit market, further harming the legal market and exposing consumers to untested, unregulated marijuana, cannabis businesses say.

    “It’s going to make the illicit market more affordable by a wide margin, and the tax revenue will escape the state completely,” Jesse Rose, founder of Exotic Matter, a flower and rosin cultivator, tells Metro Times. “It’s going to create a bigger black market. It’s funny that some politicians would be in support of that.”

    In the same week the Michigan House approved the wholesale tax, California Gov. Gavin Newsom signed a bill to roll back a 25% tax increase on recreational cannabis. He approved the measure because the state’s high tax rates have forced thousands of legal businesses to shut down and drove residents to the unregulated market.

    A 2024 report by California’s Department of Cannabis Control estimated that licensed growers supplied only about 38% of the cannabis consumed in the state, meaning roughly 62% came from the illicit market. 

    For whatever reason, state lawmakers aren’t learning from California’s troubles. 

    “We’ve already seen this story play out. California taxed the crap out of operators,” says Seth Miller, co-owner of Growing Pains. “Wise people are able to learn from others’ mistakes, not their own.”  

    Miller says the tax increase lacks “foresight” because it will ultimately erode state revenue by leading to a loss in payroll taxes and other sources of revenue. 

    “It’s going to stifle business, job growth, and income taxes,” Miller says. “I think it’s shortsighted.”

    Bill “Chocolate” Anderson, owner of the Refinery dispensary in Detroit and the cultivator Hytek agrees, pointing out that consumers are already under water with inflation and the economy. 

    “If the 24% tax is approved, it will crater the market,” Anderson says. “We’ll have one of the highest tax rates in the nation. It will slow everything down. Less weed will sell. The market is so fickle. A few dollars to the customer is a big deal.”

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    While Whitmer and state lawmakers target the cannabis industry, legislators have not touched the 4% liquor tax since it was set in 1985. That may be because the liquor industry has one of the most powerful lobbies and has donated heavily to Whitmer and other lawmakers. 

    “It seems like they are picking on us because we don’t have the lobbyists that other industries do,” Anderson says. “They aren’t going after alcohol and tobacco.”

    The state’s Cannabis Regulatory Agency charges up to $24,000 a year just for a license. The fines for cannabis business violations are also far more punitive than those imposed on the liquor industry. On average, fines against cannabis businesses have exceeded $150,000 a month. By contrast, liquor fines generally don’t surpass $300 because lawmakers capped the penalties in 1998.   

    The tax hike defies the intent of voters who legalized recreational cannabis in 2018 as part of a ballot measure. The initiative required a 10% excise tax and 6% sales tax on cannabis sales. Cannabis advocates wanted to keep the rate relatively low to undercut the black market and ensure the legal market is thriving. 

    The proposed tax increase “is a slap in the face to the cannabis industry and voters,” says Nick Hannawa, partner and chief legal counsel of Puff Cannabis, which has 11 dispensaries and a 30,000-plant outdoor grow. 

    “It’s very sad. They are out of touch,” Hannawa says of lawmakers, noting they “snuck in” the tax increase in the House. “It’s totally unfair to a struggling industry. We are already taxed more harshly than any other industry in the country.”

    If the bill is ultimately approved, cannabis business owners plan to file a lawsuit against the state, arguing that lawmakers are barred from imposing a tax increase. Because recreational cannabis was approved as part of a ballot measure, any changes by the Legislature must pass with a three-fourths supermajority in both the House and Senate. 

    Whitmer is trying to get around that requirement by imposing a tax on wholesalers, instead of cannabis sales. But cannabis business leaders don’t accept that. 

    “We are not going to roll over and die,” Miller says. “I think this is unconstitutional. I can see this going to the state Supreme Court.”

    Cannabis industry experts estimate that a third of the sales in Michigan — or about $1 billion a year — come from border states like Indiana, Illinois, Ohio, and Wisconsin in pursuit of lower prices. But the new 24% tax wouldn’t make the trip worthwhile, cannabis business owners say. 

    “A lot of Michigan’s revenue comes from these bordering states because we have lower taxes,” Steve Mayo, owner of Mitten Canna Co., a cultivator, says. “This tax increase would give them no incentive to come to Michigan.”

    The state’s cannabis excise tax raised about $331 million in revenue last year from $3.3 billion in sales. If the industry loses a third of its customers, that’s $110 million. And that’s not to mention state residents who flock to the illicit market for cheaper prices.

    Rose says the tax increase is a betrayal to cannabis businesses owners, many of whom dumped their life savings into the industry based on false promises. 

    “You put your life savings in an industry, and you build your business around what citizens voted for,” Rose says. “Now they want to add a big tax increase in one day. Find me another industry that has had that kind of tax increase overnight. No one would have done business in Michigan if they thought this was going to happen.” 

    Miller says he hopes the state Senate understands what’s at stake. 

    “Hopefully they can use reason and logic and the information we are providing to them,” Miller says. 

    The state’s cannabis market is struggling because the state doesn’t cap the number of businesses allowed in the market, like it does with liquor. As a result, the market is saturated with cannabis products, causing prices to plummet.

    In August, the average price of recreational flower hit a record low of $61.79 per ounce. The average price of an ounce was $82.50 last year, $128 in 2022, and $512 in January 2020, when legal sales began.

    The tax hike “is going to cripple the industry,” Mayo says. “It’s going to force a lot of businesses to close.”

    Rose says ignoring voters’ intent will only deepen the public’s distrust of elected officials. 

    “You destroy people’s faith in the government, which is too bad,” Rose says. “People are entrepreneurs, and they took a chance and built a new industry from scratch, and now this is how the state is going to react — to pull the rug out from beneath us?”


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    Steve Neavling

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  • Fact check: Whitmer didn’t snub Hamtramck city officials at Negro League event

    Fact check: Whitmer didn’t snub Hamtramck city officials at Negro League event

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    When Gov. Gretchen Whitmer and other state officials joined more than 100 Negro League baseball fans to celebrate Juneteenth at Historic Hamtramck Stadium on Wednesday, city officials were nowhere to be found.

    Residents, including former Mayor Karen Majewski, took to social media to question why their elected officials didn’t turn out to an event that honored Hamtramck’s unique place in Negro League baseball history.

    Hamtramck Mayor Amer Ghalib, a Muslim and self-described Democrat who has clashed with others in his party over his positions on LGBTQ+ issues, suggested he was disrespected by Whitmer and her staff.

    “No one informed me that the governor is coming, city manager had no clue, and it seems that there is a disconnect somewhere,” Ghalib responded on Majewski’s Facebook post. “We will find out who is responsible for the miscommunication and disrespect of the city leadership and fix that problem soon.”

    Turns out, there appears to be no “disrespect.” Whitmer decided to come at the last minute, making it nearly impossible to coordinate her visit with city officials so soon before the event. In fact, event organizers didn’t know Whitmer was coming until less than an hour before her arrival.

    And it wasn’t her event. It was organized by the Friends of Historic Hamtramck Stadium and Hamtramck Parks Conservancy.

    And what Ghalib doesn’t mention is that organizers of the event invited him and the all-Muslim Hamtramck City Council to the event during a June 11 public meeting, but they didn’t show up.

    Ghalib, who says he was nearby at another Juneteenth event, insisted he knew nothing about the event, despite being invited on June 11. He claims on Facebook that “we never heard” of the event, and “I was never invited.”

    Curiously, Hamtramck Police Chief Jamiel Altaheri was at the event.

    State Rep. Abraham Aiyash, a Democrat from Hamtramck, attended the event and dismissed claims that something sinister was at play.

    “It was a very last minute decision,” Aiyash said of Whitmer’s arrival. “For what it’s worth, I was notified less than an hour before the event. Definitely wasn’t anything nefarious.”

    Whitmer arrived at the event shortly before noon and headed to Detroit afterwards for another Juneteenth celebration — the groundbreaking of the Doctor Violet T. Lewis Village, a 105-unit affordable housing development on the site of the former Lewis College of Business, Michigan’s only Historically Black College and University (HBCU).

    The apparent misunderstanding comes at a critical moment for Democrats, and the criticism by Ghalib underscores the growing disconnect between Democrats and many Muslims, who are angry with President Joe Biden for supporting Israel’s brutal war in Gaza, where tens of thousands of innocent Palestinians have been killed. During the presidential primary election in February, many local Muslims and other supporters of Palestinian rights voted “uncommitted” to send a message to Biden.

    The presidential election is expected to be a nail-biter in Michigan, and as a swing state, it could play a deciding role in who wins nationally.

    Whitmer, who is a co-chair of Biden’s 2024 campaign, previously said she opposed the uncommitted campaign because it would help put Donald Trump back in office.

    “It’s important not to lose sight of the fact that any vote that’s not cast for Joe Biden supports a second Trump term,” Whitmer said in February during an interview on CNN’s State of the Union. “A second Trump term would be devastating. Not just on fundamental rights, not just on our democracy here at home, but also when it comes to foreign policy. This was a man who promoted a Muslim ban.”

    As far as the war is concerned, Whitmer has been largely quiet lately but said in April that she hopes “we can have some peace very soon.”

    That same month, Whitmer condemned chants of “death to America” by some activists at a Dearborn rally. The group that held the rally said they opposed the chants.

    “This hateful rhetoric is unacceptable, and does not represent Michigan or Dearborn,” Whitmer’s office told Fox News Digital at the time. “The Dearborn community is full of hardworking, proud Americans. Our state is diverse, and we are proud of it.”

    At the Historic Hamtramck Stadium event, Whitmer signed a bill recognizing May 2 as Negro Leagues Day in Michigan — commemorating the first day a Negro League game was played.

    “This league was not only a crucial part of baseball history but also a testament to the strength, resilience and talents of Black athletes who overcame significant barriers to play the game that they loved,” Whitmer said. “By commemorating this day, we pay tribute to their legacy and ensure that their stories of perseverance continue to inspire future generations.”

    Also in attendance were Lt. Gov. Garlin Gilchrest II and state Rep. Helena Scott, D-Detroit.

    “As a Detroit native, but also as a Black man, I am particularly proud to see this day recognized in the state of Michigan,” Gilchrist said. “As one of the eight founding teams of the Negro Leagues, the Detroit Stars are a testament to the rich sports history of our city and state. This acknowledgement not only honors their legacy but also educates and inspires our communities about the resilience and achievements of these pioneering athletes.”

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    Steve Neavling

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