By Alethia Kasben
Gongwer News Service
Amending the Michigan Regulation and Taxation of Marihuana Act with a three-fourths vote in the Legislature is not the sole method to create a tax on cannabis, the Court of Claims said on Monday in a ruling that clears the way for the tax to take effect next year.
In Holistic Research Group v. State of Michigan and Michigan Cannabis Industry Association v. State of Michigan (Docket Nos. 25-000159-60), Judge Sima Patel ruled mostly for the state, denying cannabis advocates and businesses’ requests for a preliminary injunction to block the 24% wholesale tax from being implemented. She left one aspect of the plaintiff's argument open for further discussion.
Rose Tantraphol, spokesperson for the MiCIA, said its legal team is reviewing the decision to determine next steps.
“We don’t believe the Court of Claims made the right call,” she said in a statement. “While we are deeply frustrated by this ruling, I can tell you this: The fight is far from over. We remain confident in the strength of our case that this move by the Legislature violated the will of the voters who approved the 2018 citizen ballot initiative. We plan a swift appeal.”
Cannabis groups argued the move to pass another law to implement the wholesale tax was an unconstitutional one to avoid needing a supermajority vote to amend the initiated law that legalized cannabis in the state.
Patel disagreed, writing the Comprehensive Road Funding Tax Act, which created the 24% tax, is consistent with the MRTMA because the law uses the term, “in addition to all other taxes,” when outlining what taxes are charged on marijuana purchases.
“The CRFTA is consistent with the MRTMA. Plaintiffs contend that the phrase ‘all other taxes’ in (the MRTMA) refers only to generally applicable taxes, like the 6% sales tax imposed on all retail sales,” Patel wrote. “If that were true, however, the initiative could have simply said that. Instead, the initiative stated plainly that the 10% retail excise tax was in addition to ‘all other taxes.’ And the phrase ‘all other’ is broad and expansive.”
Although Patel ruled the 24% wholesale tax on marijuana was not an amendment of the overall law regulating recreational marijuana in the state, she did say more facts are needed to determine if the new tax “interferes and conflicts with the purposes of the MRTMA.”
“This is not a legal issue, but a question of fact. The court must consider the intentions of the MRTMA drafters and the impact of the new wholesale excise tax on the purposes of the MRTMA,” Patel wrote. “The court may not resolve such factual questions at the summary disposition phase. Discovery will be required to develop the evidence needed to support the parties’ positions in this regard.”
Overall, Patel denied the plaintiffs’ motions for preliminary injunction and summary disposition. She granted in part the state’s motion for summary disposition, but denied it in part when asking for more discovery on the effect of the new tax.
Patel ordered a scheduling conference on Jan. 14, 2026, which will be after the new tax takes effect on Jan. 1. She also cited the likelihood that the decision will be appealed.
Gongwer News Service
Amending the Michigan Regulation and Taxation of Marihuana Act with a three-fourths vote in the Legislature is not the sole method to create a tax on cannabis, the Court of Claims said on Monday in a ruling that clears the way for the tax to take effect next year.
In Holistic Research Group v. State of Michigan and Michigan Cannabis Industry Association v. State of Michigan (Docket Nos. 25-000159-60), Judge Sima Patel ruled mostly for the state, denying cannabis advocates and businesses’ requests for a preliminary injunction to block the 24% wholesale tax from being implemented. She left one aspect of the plaintiff's argument open for further discussion.
Rose Tantraphol, spokesperson for the MiCIA, said its legal team is reviewing the decision to determine next steps.
“We don’t believe the Court of Claims made the right call,” she said in a statement. “While we are deeply frustrated by this ruling, I can tell you this: The fight is far from over. We remain confident in the strength of our case that this move by the Legislature violated the will of the voters who approved the 2018 citizen ballot initiative. We plan a swift appeal.”
Cannabis groups argued the move to pass another law to implement the wholesale tax was an unconstitutional one to avoid needing a supermajority vote to amend the initiated law that legalized cannabis in the state.
Patel disagreed, writing the Comprehensive Road Funding Tax Act, which created the 24% tax, is consistent with the MRTMA because the law uses the term, “in addition to all other taxes,” when outlining what taxes are charged on marijuana purchases.
“The CRFTA is consistent with the MRTMA. Plaintiffs contend that the phrase ‘all other taxes’ in (the MRTMA) refers only to generally applicable taxes, like the 6% sales tax imposed on all retail sales,” Patel wrote. “If that were true, however, the initiative could have simply said that. Instead, the initiative stated plainly that the 10% retail excise tax was in addition to ‘all other taxes.’ And the phrase ‘all other’ is broad and expansive.”
Although Patel ruled the 24% wholesale tax on marijuana was not an amendment of the overall law regulating recreational marijuana in the state, she did say more facts are needed to determine if the new tax “interferes and conflicts with the purposes of the MRTMA.”
“This is not a legal issue, but a question of fact. The court must consider the intentions of the MRTMA drafters and the impact of the new wholesale excise tax on the purposes of the MRTMA,” Patel wrote. “The court may not resolve such factual questions at the summary disposition phase. Discovery will be required to develop the evidence needed to support the parties’ positions in this regard.”
Overall, Patel denied the plaintiffs’ motions for preliminary injunction and summary disposition. She granted in part the state’s motion for summary disposition, but denied it in part when asking for more discovery on the effect of the new tax.
Patel ordered a scheduling conference on Jan. 14, 2026, which will be after the new tax takes effect on Jan. 1. She also cited the likelihood that the decision will be appealed.
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