Michigan’s legal marijuana industry association has asked a judge to put the brakes on implementing a new excise tax on marijuana while a legal challenge is underway.
The motion for an injunction filed with the Michigan Court of Claims is an early step in a legal process that could take months to play out. The new excise tax to raise money for roads is supposed to begin in January.
The Michigan Cannabis Industry Association says the new 24% wholesale tax piled on existing taxes “is the proverbial straw that will break the camel’s back,” and will drive under existing legal businesses.
The association argued it expects to prevail because Governor Gretchen Whitmer and lawmakers engaged in some legislative sleight of hand by amending Michigan’s voter-approved recreational marijuana law while pretending the bill was only about taxes to fund roads.
The substance of voter-approved initiatives can only be changed by the Legislature with three-fourths supermajority votes.
“Therefore, while the State may claim an interest in raising revenue to rebuild roads, it cannot use the enforcement of an unconstitutional tax that will destroy businesses and livelihoods to achieve that goal,” said the filing, adding the damage to its members would be “immediate and irreparable.”
This is the first filing since the industry’s initial notice of its plan to challenge the tax. The state has not yet filed its reply to the lawsuit. The Michigan Treasury, which is in charge of implementing the tax declined to comment “due to the ongoing litigation.”
