LANSING, Mich. — Michigan's new 24% wholesale tax on marijuana brought in less tax revenue than projected in the first quarter of its existence, generating less money for repairing roads, according to a state treasury report.

When lawmakers voted to implement the wholesale tax last year, a nonpartisan House Fiscal Agency analysis estimated it would bring in about $420 million a year, or about $105 million a quarter.

But the Michigan Treasury Department report indicates the new tax has brought in nearly $34 million through the end of April, less than 33% of the original projection.

The new tax, which went into effect Jan. 1, is supposed to be a key contributor to a revamped state plan to fund road improvements. The tax revenue report was first reported by Crain's Detroit Business.

The Michigan Cannabis Industry Association pointed to the lower-than-expected collections in the first quarter of 2026 as proof of its prediction that sales would decline because of the new tax.

“Our elected leaders made the cannabis industry a sacrificial lamb in order to have the illusion of a road funding fix," said Robin Schneider, executive director for the association.

"In reality, the only thing they have accomplished is the decimation of a strong industry that served as an economic driver for this state. The result is business closures, jobs lost and tax revenue taken away from local governments.”

The cannabis industry trade group has argued over the past several months that a wholesale tax on marijuana — which already carries a 6% sales tax and 10% excise tax — would flatten the industry and push more people toward the illegal market.

A case challenging the legality of the tax is pending in court.

In November 2023, the Cannabis Regulatory Agency provided Gov. Gretchen Whitmer's office with a four-page memo on the potential repercussions of a similar tax on marijuana.

But Whitmer's administration has refused to fully release the internal analysis, which appears to detail how the tax would impact the industry and whether it would shift purchasers to the illegal market.

The Cannabis Regulatory Agency on Thursday said it was difficult to draw conclusions at this point in the year about a potential uptick in black-market activity in the wake of the wholesale tax.

"Investigations into illicit market activity are generally considered a trailing indicator, meaning there can be a significant lag between activity occurring and it being identified, investigated, and reflected in enforcement data," said David Harns, a spokesman for the agency.

Monthly adult use marijuana sales from January through April this year have come in lower than the January through April sales for 2025 and 2024, according to data collected by the Cannabis Regulatory Agency.

For example, in 2025, the CRA reported $246.6 million in adult use sales for January, $241.3 million in February, $276.3 million in March and $270 million in April.

In 2026, so far, the agency has reported $226.4 million in adult-use sales for January, $234.2 million for February, $255.1 million for March, and $258.2 million for April.

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—Staff Writer Craig Mauger contributed.

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