LANSING, MI — Members of Michigan’s marijuana industry want the court to block a new 24% wholesale tax on marijuana, set to take effect Jan. 1.

An Oct. 29 Court of Claims filing said the Comprehensive Road Funding Tax Act (CRFTA), passed on Oct. 3, which imposes the new tax is an “unconstitutional statute adopted in derogation of the voters’ rights.”

The law narrowly passed with bipartisan support following negotiations between the Republican-led House, Democrat-majority Senate and Gov. Gretchen Whitmer’s administration. The agreed-upon state budget relies heavily on the newly pegged marijuana tax revenue.

Whitmer previously proposed a 32% wholesale tax on marijuana, projecting it could generate about $470 million in new revenue for road repairs. A legislative analysis predicts the 24% tax will generate $420 million.

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

However, marijuana insiders believe that figure is inflated and doesn’t account for lost sales due to price increases, especially along the borders, where stores thrive selling to out-of-state buyers.

The new tax would make Michigan’s marijuana among the most heavily taxed in the nation.

Related: Michigan may soon have among the nation’s highest marijuana tax rate

The core argument against the tax focuses on origination of the Marijuana Regulation and Taxation of Marijuana Act (MRTMA), which began as a ballot initiative passed by voters in 2018.

Among other things, the law established the tax structure that was put in place when recreational marijuana sales began in December 2019.

Since the law was initiated by voters, the state Constitution in an effort to protect the public’s will requires a supermajority — 3/4 support of both the House and Senate — in order to amend it.

The state Senate narrowly passed legislation for the new tax, 19-17.

Politicians argue the original law doesn’t preclude new taxes, and the new act doesn’t alter the voter-passed taxes. Because it is a new and independent law, it doesn’t infringe on MRTMA or require supermajority support, they say.

A lawsuit subsequently filed by the Michigan Cannabis Industry Association, a 400-plus business lobbying group, and PG Manufacturing, a Lansing-based marijuana business, called it “legislative gamesmanship.”

The lawsuit equates the tactics to efforts by the Legislature to subvert a ballot initiative aimed at providing guaranteed sick time and increased minimum wages in 2018.

In that case, the Legislature adopted a ballot proposal without amendment — preventing it from appearing on the ballot — and then amended the law later in the session. The state Supreme Court dubbed it an illegal adopt-and-amend scheme.

“So, too, should this court find that the Legislature’s current ploy subverts the will of the people, undermines faith in our governmental institutions and finds no support in our Constitution,” the marijuana tax lawsuit argues.

The lawsuit claims other constitutional violations stemming from passage of the CRFTA.

It was introduced with vague language related to road funding and without mentioning marijuana.

“While most bills are subject to committee hearings and debate before being reported by the committee to the floor, (this legislation) took a notably different path,” the complaint said. “On September 25, 2025, the House, by means of a mere voice vote, abruptly suspended its rules and discharged the bill from committee without that committee ever conducting a hearing.”

Upon discharge, the House “promptly voted to adopt a substitute to the bill that completely rewrote the body of the bill to create a convoluted structure for levying a 24% excise tax … ”

The bill passed 78-21 in the House, but would have required 83 votes in support to reach a supermajority.

Because it was voted on shortly after the addition of the marijuana language that fundamentally changed the purpose of the bill, the lawsuit claims it didn’t meet a Constitutional requirement that it “remain in the possession of each legislative chamber for a minimum of five days before passage.”

Additionally, the lawsuit alleges the act’s title didn’t clearly reflect its purpose, as required by the state Constitution.

If the motion for a preliminary injunction is granted, the tax could be placed on hold until the lawsuit is resolved.

Marijuana industry insiders worry the tax will disrupt the market, causing businesses to fail — and will ultimately be passed along to consumers.