Michigan’s new 24% wholesale marijuana tax fell short of projected revenue in its first quarter, generating less money than expected for road repairs, according to a state treasury report.
When lawmakers approved the wholesale tax last year, a nonpartisan House Fiscal Agency analysis estimated it would generate roughly $420 million annually, or about $105 million per quarter.
The Michigan Treasury Department report shows the new tax collected nearly $34 million through the end of April — less than 33% of the original projection.
The tax, which took effect Jan. 1, was designed to serve as a key funding source for a revamped state road improvement plan. Crain’s Detroit Business first reported on the revenue figures.
The Michigan Cannabis Industry Association cited the weaker-than-expected first-quarter collections as confirmation of its earlier warning that the new tax would suppress sales.
“Our elected leaders made the cannabis industry a sacrificial lamb in order to have the illusion of a road funding fix,” said Robin Schneider, executive director for the association.
“In reality, the only thing they have accomplished is the decimation of a strong industry that served as an economic driver for this state. The result is business closures, jobs lost and tax revenue taken away from local governments.”
The cannabis industry trade group has argued for months that a wholesale tax on marijuana — which already carries a 6% sales tax and a 10% excise tax — would cripple the industry and drive more consumers toward the illegal market.
A legal challenge to the tax remains pending in court.
In November 2023, the Cannabis Regulatory Agency provided Gov. Gretchen Whitmer’s office with a four-page memo outlining the potential consequences of a similar marijuana tax.
Whitmer’s administration has since refused to fully release the internal analysis, which appears to detail the tax’s projected impact on the industry and whether it could push buyers toward the black market.
The Cannabis Regulatory Agency said Thursday that it was too early to draw firm conclusions about a potential rise in illicit market activity following the wholesale tax’s implementation.
“Investigations into illicit market activity are generally considered a trailing indicator, meaning there can be a significant lag between activity occurring and it being identified, investigated, and reflected in enforcement data,” said David Harns, a spokesman for the agency.
Monthly recreational marijuana sales from January through April have tracked below the same period in both 2025 and 2024, according to Cannabis Regulatory Agency data.
In 2025, the agency reported recreational sales of $246.6 million in January, $241.3 million in February, $276.3 million in March and $270 million in April.
In 2026, those figures have come in lower across the board — $226.4 million in January, $234.2 million in February, $255.1 million in March and $258.2 million in April.