Article courtesy of MIRS for SBAM’s Lansing Watchdog newsletter
The state’s leading cannabis trade association filed an appeal of a ruling upholding the state’s 24% cannabis tax on Tuesday.
A spokesperson for the Michigan Cannabis Industry Association (MCIA) said the appeal is intended to protect the will of Michigan voters.
“We stand by our belief that the Court of Claims did not make the right call when it issued an opinion that declined to block the Michigan Legislature’s unconstitutional 24% wholesale tax on cannabis from going into effect on New Year’s Day,” said MCIA spokesperson Rose Tantraphol.
“Our filing requests that the Court of Appeals take up our lawsuit, which we continue to believe is an exceptionally strong case on the merits,” she added. “The 24% wholesale tax violates the will of the voters who approved the 2018 citizen ballot initiative on cannabis, and we will not back down from fighting for the will of the people in court.”
The MCIA asked the Michigan Court of Appeals to immediately consider the appeal as the wholesale tax is set to go into effect Jan. 1.
The MCIA and the Harrison Township-based Holistic Research Group filed separate lawsuits challenging the tax, but the court consolidated the cases.
Earlier this month, Court of Claims Judge Sima Patel denied the plaintiffs’ request for a preliminary injunction blocking implementation of the tax.
MCIA wants the tax struck in its entirety, arguing the rushed and chaotic late-night process that led to the tax occurred in violation of several constitutional provisions.
Tantraphol said it’s important the appeal is moved to the Court of Appeals and expedited, because waiting for a trial would cause unnecessary delay for the Court of Appeals to consider these important issues. Any delay in reaching an ultimate decision harms the industry, which is likely to face this unconstitutional wholesale tax until then.
“The stakes are incredibly high,” Tantraphol said. “The Michigan cannabis industry has been an economic engine for our state since voters legalized marijuana in 2018.
“Our industry has created 47,000 new jobs, pumped $331 million annually to schools, roads, and other public priorities through the 10% excise tax we collect, and generated $188 million in annual sales taxes. This unconstitutional move by the Legislature jeopardizes all of that,” Tantraphol said, noting that one cannabis operation in Webberville has already announced it will close, while another business has told MiCIA that it will close soon.
One business in the Upper Peninsula permanently laid off 61 employees last week, Tantraphol noted.
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