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Michigan's Marijuana Taxes Are High_ But Sales Are Not
Russ Survance
Fri, 27 Feb 2026 05:37:24 EST
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Michigan's recreational cannabis industry stumbled out of the gate in 2026, as January sales dropped sharply following a blockbuster finish to last year.
Figures released by the state's Cannabis Regulatory Agency show adult-use marijuana sales reached nearly $269 million in December, capping off a record-setting year. But the momentum didn't carry into the new year. Sales in January fell by roughly 16% compared to the previous month, a decline many in the industry say was expected - though still painful.
Retailers point to a rush of purchases in late 2025 as customers and businesses scrambled to get ahead of a new 24% wholesale tax that took effect January 1st. The levy comes on top of Michigan's existing 10% excise tax and 6% sales tax, creating a significantly higher overall tax burden on cannabis products. Revenue from the new wholesale tax is designated for transportation infrastructure.
Dispensaries reported heavy buying activity in December as consumers stocked up before prices climbed. That front-loaded demand, combined with the typical slowdown after the holidays, left January sales looking especially weak.
Efforts to stop the wholesale tax before it took effect were unsuccessful. Industry groups challenged the measure in court, arguing it conflicted with the state constitution and Michigan's voter-approved cannabis law, but a judge declined to block the policy.
