GRAND RAPIDS, Mich. — A new 24% wholesale tax on marijuana in Michigan is sparking controversy among cannabis business owners and advocates who say the measure could devastate locally owned operations and drive up consumer prices.
The tax, which takes effect in January, was passed by lawmakers to help fund the state's roads plan. However, cannabis industry representatives are pushing back, with the Michigan Cannabis Industry Association filing a lawsuit calling the tax "unconstitutional."
Casey Kornoelje, owner of Pharmhouse Wellness in Grand Rapids, operates both a cultivation facility and retail operation. He said the wholesale tax will be triggered when products transfer from grow or manufacturing sites to retail locations.
"What you're seeing is ground zero for what's happening with the wholesale tax," Kornoelje said. "This is people's life savings on the line. And it's really sad."
Kornoelje treats his cannabis cultivation like a personal craft, maintaining careful growing conditions in his Wealthy Street warehouse. After a three-month growing cycle, he harvests and packages the buds for retail sale.
The business owner fears the new tax could force many operators to raise prices for consumers like Landon Luna, who shops at Pharmhouse specifically because it's locally owned with its own growing facility.
"It's better to preserve the prices as they are," Luna said.
Cannabis advocates gathered outside the state capitol last week to protest the tax, expressing concerns about potential job cuts and higher costs being passed to customers.
Kornoelje believes the change is punitive and counterproductive for an industry he says has been successful in contributing jobs and tax revenue to the state.
"It won't accomplish the goals that I think a lot of the politicians that crafted House Bill 4951 actually think it's going to do," Kornoelje said.
The new wholesale tax adds to existing marijuana taxes in Michigan, including a 10% excise tax on retail sales and 6% sales tax. According to the Associated Press, this combination will place Michigan's marijuana taxes among the highest in the nation.
While Kornoelje said there's still nuance in the new tax law for businesses to navigate, he expects his operation to survive without passing costs to customers, though he fears for other businesses in the industry.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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