Cannabis Revenues DROP SHARPLY After Massive Tax Hike

The Michigan legislature claimed that cannabis revenues would reach up to $400 million per month to justify their massive tax hike on the cannabis industry to "fix the roads."

Instead, cannabis revenues have dropped sharply and predictably as prices go up and consumers are forced back into the black market.

WMMT News Channel 3 reports:

"LANSING, Mich. — A controversial Michigan marijuana wholesale tax went into effect Jan. 1, putting an extra 24% charge on the books for distributors.

The tax was put in place to pay for road work, but a bipartisan group of some senators wants to see the marijuana tax structure returned to what voters approved in 2018.

Analysts projected the wholesale tax could bring in more than $400 million, though the cannabis industry and independent reports questioned whether that would actually materialize.

Now, new Cannabis Regulatory Agency data shows a steep drop-off in revenue, from $269.2 million in December to $226.4 million January, a 16% decline.

"We might not get the revenue that was expected on the wholesale side for roads," Sen. Jonathan Lindsey (R - Coldwater) said. "At the same time, well, that will mean that revenue is going down in other sources on the excise tax and the sales tax, that currently are going into other parts of funding services for people."

Lindsey opposed the tax from the start and introduced the repeal bill. Among other things, he worries the wholesale tax is hurting business and revenue.

"I have heard, especially from locals," Lindsey said. "Some of them have described to me, that they've already had to do layoffs or, you know, make other adjustments that, you know, I don't think we've seen the full magnitude of the impact yet, but it certainly has set in and already had deleterious effects."

If Lindsey's bill were to pass, only the standard 10% excise tax would remain at sale...

Lindsey feels the state should make cuts as a replacement for the wholesale tax.

"My preference is that the state of Michigan stop growing larger, live within its means," Lindsey said. "It takes enough from the people."

Even if Lindsey's bill fails to pass, the tax is still at risk, as an industry lawsuit seeking to stop it heads to trial."