LANSING, Mich. — Michigan’s new 24% marijuana wholesale tax, enacted as part of this year’s state budget, is being allowed to go into effect following a judge’s ruling on Monday.

The funds raised by the tax will help road projects, a priority of Gov. Gretchen Whitmer and State House Republicans.

In response to the tax, the Michigan Cannabis Industry Association (MiCIA) filed a lawsuit against the state. They argue the tax is illegal and goes against a ballot measure voters approved in 2018, which already taxes people who buy marijuana.

State Court of Claims Judge Sima Patel found the challenge isn’t likely to succeed and is allowing the tax to take effect on Jan. 1, 2026.

MiCIA said they plan to appeal.

“We don’t believe the court of claims made the right call,” MiCIA Spokesperson Rose Tantraphol said. “While we’re deeply frustrated by this ruling, I can tell you this: the fight is far from over.”

The state treasury confirmed it will be moving ahead with collection once the tax is in effect in three ways:

• At the first sale or transfer from a wholesaler to a retailer
• When retailers produce their own marijuana
• During sales or transfers between medical provisioning centers and recreational retailers

The question for wholesalers, though, is: who ends up footing the bill?

The president of wholesaler Glacier Cannabis — which also has its own store in Big Rapids — fears the cost will consequently fall on the consumer.

“With a 24% tax, if we had to assume that, let’s be honest, the margin’s nowhere near that,” Glacier Cannabis President Andrew Sereno said. “I think there’s only one option in the end is to raise prices.”

Sereno isn’t sure how much they’ll end up paying, but he expects to take a hit.

“I actually, you know, sent a letter out to the Glacier shareholders saying, you know, we’re pausing any distributions, any dividends, looking to stack the, you know, stack up the bank account to be able to survive the storm,” he said.

Sereno says customers could be turned off by higher prices.

“Michigan, doing what it did and having the price where it was, out competed the black market and also made for great interstate — you know, sales in that way — but now, it changes it completely,” Sereno said.

MiCIA claims in its lawsuit it was the cannabis industry’s biggest job creator in Michigan ever since recreational use was approved in 2018.

Sereno fears that too will be impacted as he sees more store closures on the horizon.