24%: Michigan Rep. Jay DeBoyer plans bill to suspend wholesale marijuana tax for 12 months; no bill number yet

Michigan state Rep. Jay DeBoyer, R-Clay Township, says he will introduce a bill to suspend the state's 24% wholesale marijuana tax for 12 months, giving lawmakers time to reevaluate a levy that has brought in far less money than projected. DeBoyer announced the plan Oct. 22 in a release from the Michigan House Republicans, and Cannabis Business Times and The Marijuana Herald reported on it Oct. 26.

As of Oct. 26, no bill number or introduction date had been announced, The Marijuana Herald reported. The House Republican release says the plan "will soon be formally read into the record and referred to a House committee upon introduction." Until a change becomes law, the 24% tax stays in effect, and the Michigan Department of Treasury continues to administer collections, the Herald noted.

DeBoyer is also the Republican nominee for lieutenant governor, running with gubernatorial nominee John James in the Nov. 3 election, Cannabis Business Times reported.

What the tax is

Michigan's 24% wholesale marijuana tax took effect Jan. 1, 2026, as part of a road funding package Gov. Gretchen Whitmer (D) signed in October 2025, according to The Marijuana Herald. The law is the Comprehensive Road Funding Tax Act. The wholesale tax applies to certain sales and transfers of recreational marijuana to licensed retailers and sits on top of the state's existing 10% retail marijuana excise tax and 6% sales tax, the Herald reported.

Revenue has fallen short of projections. Initial estimates projected the wholesale tax would generate $420.7 million a year, according to a 2025 fiscal analysis, but it brought in $73.4 million through the first six months of 2026, about 35% of what it should have generated, according to the Michigan State Budget Office, Cannabis Business Times reported.

What DeBoyer says

"The road funding plan that taxed marijuana was created and signed in haste by the Whitmer administration to generate revenue, and we've seen the impacts of that haste," DeBoyer said in the release. "The tax is generating tens of millions of dollars less in revenue than what was projected and there's no enforcement agency to collect it. It's also driving the marijuana industry back into the black market and forcing business owners who are following the law to compete with nefarious actors. This is a lose-lose."

DeBoyer said he backed the broader road funding legislation but doubted the marijuana piece from the start. "I supported the original legislation at large for needed road funding, but I was always skeptical to impose a tax with no mechanism to collect it," he said. "This pause is needed to reevaluate the future effectiveness of the tax. Otherwise, it's a useless tax and the state is forcing local businesses to pay for a policy that isn't working as intended."

The release describes the plan as one that "alleviates tax burdens and helps small businesses that are operating lawfully." DeBoyer has called the tax "ineffective" and "punitive," Cannabis Business Times reported.

The market backdrop

Michigan's licensed retail market is projected at about $3 billion in sales this year, a slight dip from $3.3 billion in 2024 and $3.2 billion in 2025, and the average price per ounce remains near an all-time low of about $60, according to the Michigan Cannabis Regulatory Agency, Cannabis Business Times reported. Michigan's unlimited-license market has seen oversupply that has led to some of the lowest cannabis prices in the nation, the outlet said.

Industry stakeholders warned last year, when the tax was included in the state's $81 billion budget, that it would drive many operators out of business, Cannabis Business Times reported. In August, one licensee closed five of its nine dispensaries in the Upper Peninsula, citing the new tax as creating an "increasingly unsustainable operating environment," especially in smaller and rural communities, according to the outlet.

Other efforts to undo the tax

DeBoyer's proposal is a temporary pause. Other Republican-led efforts would go further:

• Senate Bill 810, filed by a group of eight bipartisan senators, would repeal the Comprehensive Road Funding Tax Act entirely. It was referred to the Senate Government Operations Committee in late February and hasn't received a hearing, Cannabis Business Times reported.
• House Bill 6224, introduced in July by state Rep. James DeSana (R), would also repeal the act, The Marijuana Herald reported.

Sen. Jonathan Lindsey, R-Coldwater, the sponsor of S.B. 810, has said the tax "will also damage Michigan businesses and lead to widespread job losses across the state," and that he didn't believe "in the long term this mechanism will generate the expected revenue, especially if sales go down as a result of the increased taxes or if legal challenges against the tax prevail," according to Cannabis Business Times.

Where the governor's race stands on the tax

James said in August that, if elected, he would work to "repeal or sharply reduce" the tax. "The new 24% wholesale tax (on top of the existing 10% excise plus 6% sales tax) drives up prices, gives illegal operators a competitive edge and has already fallen far short of revenue projections," James said at the time, according to Cannabis Business Times. James picked DeBoyer as his running mate shortly before making that pledge part of his campaign, the outlet reported.

Democratic nominee Jocelyn Benson, Michigan's secretary of state, called the tax a "new and emerging issue" in September and hadn't taken a firm stance, Bridge Michigan reported, as cited by Cannabis Business Times. "There's a lot of data yet to be determined on that particular tax ... we need to know where the money is going and also the impact that it's had on the industry," Benson said. "At the same time, I want to make sure that any changes we are making to our tax code do not come at the expense of driving up costs for Michiganders." Benson's running mate, Senate Majority Leader Winnie Brinks, D-Grand Rapids, voted for the tax in October 2025, Cannabis Business Times reported.

The Michigan Cannabis Industry Association has endorsed James. Executive Director Robin Schneider said James "understands that the unlawful 24% tax pushes customers to the illicit market," according to Cannabis Business Times.

What to watch

The key next step is formal introduction: a bill number and a House committee referral. Any suspension would still have to pass the Legislature and become law, and Michigan voters elect a new governor on Nov. 3, Cannabis Business Times noted. Until then, licensed businesses still owe the 24% wholesale tax under current law. This article is general information, not tax or legal advice.