John James, the Republican nominee for governor of Michigan, has promised to repeal or significantly roll back a recently enacted tax hike on the marijuana industry. He unveiled this pledge in a plank of his “Freedom Agenda” this week. The candidate stated he will work to repeal or sharply reduce the levy if elected in November.
James argued that the cannabis tax “drives up prices, gives illegal operators a competitive edge, and has already fallen far short of revenue projections.” He emphasized that Michigan voters approved a legal, regulated cannabis market in 2018. The candidate said state government has a responsibility to respect that decision while promoting workplace and community safety.
Last year, lawmakers and Gov. Gretchen Whitmer enacted a new 24 percent wholesale cannabis tax. This levy is added on top of an existing 10 percent excise tax and 6 percent sales tax on marijuana purchases.
Industry advocates have argued the increase makes it harder for legal operators to compete with the illicit market.
James also wants to crack down on sales of unregulated hemp THC products that are widely available. His plan states that “Delta-8, THCA, and synthetic cannabinoids must not be sold at gas stations or smoke shops without the same age limits, testing, and labeling required of licensed cannabis.” He added that intoxicating products belong in the regulated market not next to the candy bars.
The candidate wants to aggressively target illegal trafficking, unlicensed operators, sales to minors, tax evasion, and product diversion. He cited Chinese-linked illegal cannabis grows that he said operate in the state. James said, “As Governor, we will end these illicit grow operations and cut off the CCP’s foothold in Michigan.”
James wants the state’s Cannabis Regulatory Agency to focus on real enforcement, consumer and workplace safety, and protecting kids. He also wants to give the agency the tools to hold unlicensed operators accountable.
The Michigan Cannabis Industry Association is touting James’s marijuana tax pledge. The levy was projected by state officials to raise $420 million for road repairs and construction. Rep. James DeSana (R) says it is generating in less than half of what its supporters anticipated.
A Republican state representative filed legislation last month that would reverse the cannabis wholesale tax. The levy has been challenged in court through lawsuits filed by the cannabis industry.
Earlier this year, the Michigan Cannabis Regulatory Agency announced it is distributing nearly $100 million in marijuana tax revenue. This money goes to over 300 local governments and tribes across the state. The funds support various local infrastructure, education and other programs and services in 313 municipalities, counties and tribal areas.
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