LANSING, MI — Shortly after Gov. Gretchen Whitmer signed a new 24% wholesale tax on marijuana into law, Michigan’s most prominent cannabis trade organization filed a lawsuit.

The lawsuit, filed Tuesday, Oct. 7, in the state Court of Claims and signed by Michigan Cannabis Industry Association Director Robin Schneider, asks the court to block the tax set to take effect on Jan. 1, 2026, and declare it illegal.

The new tax is the result of bipartisan budget negotiations between the Republican-led House, Democrat-majority Senate and Gov. Gretchen Whitmer, who earlier this year floated the idea of a 32% wholesale marijuana tax to generate $470 million in new revenue for road repairs.

The reduced tax is expected to generate $420 million; however, opponents say that figure is inflated because it fails to take into account a reduction in sales due to higher prices.

“The 24% wholesale tax on cannabis passed by the Michigan Legislature and signed into law by Governor Whitmer is unconstitutional in multiple respects,” the legal team representing the Michigan Cannabis Industry Association said in a statement. “The lawsuit (also) details how the last-minute, late-night process occurred in violation of a range of other constitutional provisions.

“The Association is asking the court to strike the tax in its entirety.”

Related: As Michigan marijuana tax jumps to 40%, critics worry it’ll fuel black market

Michigan voters passed the recreational marijuana law, the Michigan Regulation and Taxation of Marihuana Act, through a ballot initiative in 2018.

The state Constitution requires any changes to a voter-initiated law to come through a public vote or three-quarter supermajority passage in both the state House and Senate.

The 2018 marijuana law includes a 10% excise tax on retail sales and stipulates that 30% of the revenue should go to local and county governments, 35% to schools and 35% to road and bridge funds.

The tax generated nearly $116 million for roads in 2024.

Related:Lawmakers finally approve Michigan’s 2026 budget, adding a 24% marijuana tax

The lawsuit alleges any new tax on marijuana constitutes an amendment and therefore is subject to public vote or supermajority support for passage.

Supporters of the new tax disagree.

Dubbed the Comprehensive Road Funding Tax Act, House Bill 4951 created a fund to collect new taxes for road construction, preservation and maintenance. The original version of the bill never mentioned marijuana and was referred to the House Appropriations Committee.

“But on September 25, 2025 — just nine days after its introduction — the House suspended its rules and discharged the bill from committee without ever conducting a hearing,” the lawsuit said. “On the same day, the House adopted a substitute to the bill, completely rewriting the body of the legislation to create a comprehensive and convoluted structure to levy an excise tax” on marijuana.

Proponents claim the new tax is a separate law that doesn’t infringe on the rights stipulated in the 2018 voter-passed language.

“When you read the initiated law from 2018, you see that it specifically references ‘other taxes,’ specifically, therefore, those who wrote this acknowledge that there are other taxes that can be charged and levied,” State Sen. Edward McBroom, R-Waucedah Township, said minutes before the Senate narrowly passed the legislation, 19-17. “And it doesn’t say that it can only be those that were in place at the time of passage.”

The lawsuit states, “while other taxes may generally apply to marijuana, such as sales tax, (the 2018 law) is the exclusive mechanism for imposing excise taxes.”

The lawsuit further alleges the new law violates the state Constitution’s “change of purpose” clause, which says the final version of a law must be “germane to the original purpose.”

“The final version of House Bill 4951 imposed a 24% excise tax on marijuana wholesale prices, defined taxable entities and transactions, mandated filings and specified how revenue generated from the new tax would be spent,” the lawsuit said. “These sweeping changes—none of which were present in the original bill—constitute an unlawful and unconstitutional change of purpose.”

The lawsuit, which names the state, Treasurer Rachael Eubanks and the Department of Treasury, concludes by asking the court to declare the new tax “unconstitutional, null and void and without legal effect.”

MLive submitted requests for comment to the state Treasury and is awaiting response.