A lawsuit challenging the state’s new wholesale marijuana tax will get its first hearing this week before a Michigan Court of Claims judge.
The Michigan Cannabis Industry Association lawsuit alleges the Legislature and Governor Gretchen Whitmer violated the state constitution when they enacted a 24% wholesale tax on marijuana as part of a late deal to pass the state budget last month. The lawsuit says they amended the 2018 voter-approved initiative that legalized recreational marijuana without the supermajorities required by the Michigan Constitution.
The state argues the tax, which is part of the Comprehensive Road Funding Tax Act, is a part of a separate revenue law that does not amend the initiative or its tax on marijuana. The state says the law’s purpose is to raise $420 million for roads and is separate from the initiative.
“Rather, the Legislature enacted a law that works in concert with the legal framework for regulating marijuana, which exists in several separate, but intertwined, laws,” said the state’s brief.
The cannabis industry complaint filed last month said that is a hollow argument.
“Therefore, while the State may claim an interest in raising revenue to rebuild roads, it cannot use the enforcement of an unconstitutional tax that will destroy businesses and livelihoods to achieve that goal,” said the filing, adding the damage to its members would be “immediate and irreparable.”
The hearing Tuesday is before Court of Claims Judge Sima Patel, who could rule on the industry’s motion to block the tax before it takes effect January 1.
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