In the midst of a lawsuit fighting the recent 24% wholesale tax on marijuana in Michigan, local cannabis retailers and manufacturers are bracing for impact.

The last 48 hours haven’t been easy for Detroit cannabis business owners Majed Hamadeh and Ali Mazloum.

On Tuesday, Gov. Gretchen Whitmer signed an $81 billion state budget into law, with an added wholesale tax on marijuana. Soon after, the Michigan Cannabis Industry Association filed a lawsuit, calling the move unconstitutional.

“This community has fought to be here for a long time, and now that we’re here, we plan to stay, whatever capacity that might be,” said Hamadeh.

“When the industry is in a crisis like we are now, we are barely breaking even, if that,” said Mazloum. “The revenue collected from this affects everything in the state.”

Mazloum is a wholesaler, growing and producing products for dozens of retailers across the metro area. He says the average Michigander may not feel the effects of the tax right away, but its impacts affect much more than his bottom line.

“The state relies on this to bring in money for our roads, for our schools, for everything that the state tries to provide for,” said Mazloum.

Data shows Michigan’s legal cannabis market is set to rake in nearly $3 billion in revenue this year, with Wayne County generating more than $31 million in August sales alone.

As co-owner of Ultra Cannabis in Detroit, Hamadeh says those numbers could take a massive fall if the wholesale tax has to be passed down to his customers.

“That’s definitely going to take a toll and be a force that’s going to really drive the average consumer away from our shops and our dispensaries across the state,” said Hamadeh.

Both business owners say they will do everything they can to weather the tax’s impact, once it takes effect on Jan. 1, 2026.

“We want people to keep their jobs and keep moving forward,” said Mazloum.

“It’s something I’d love to do and hopefully continue doing,” said Hamadeh.