DETROIT (FOX 2) – A new state budget also means a new wholesale tax on recreational cannabis. 

The new 24% wholesale tax will take effect in 2026, but some in the cannabis industry believe it will hurt their bottom line.

Big picture view:

A fiscal analysis of the plan estimates it would generate $420 million a year. 

The bill would allocate $3 million for implementing the plan while the remaining money would go into a Neighborhood Road Fund to pay for construction costs. 

Dig deeper:

When marijuana was legalized for recreational adult use in 2019, it included a 10% excise tax on all sales. A third of the revenue goes to schools, another third is sent to roads, while the last portion is distributed to local governments that have at least one cannabis business.

Michigan sells more marijuana than almost any other state. This year, cannabis sales led to $100 million for local communities.