The Michigan Court of Appeals Denies Bypass in Challenge to Recreational Marijuana Tax
The Michigan Court of Appeals has made a decision regarding a challenge brought by the cannabis industry against the new wholesale tax on recreational marijuana. The court stated that it will not bypass the state Court of Claims in this matter, which could potentially speed up the legal process but may require a thorough airing of the arguments before reaching a decision.
The three-judge panel issued a brief order denying the application for immediate appellate review, citing a lack of persuasion on the need for such review. Additionally, the court rejected a request by the state to dismiss the case, indicating that the legal process will continue.
Rose Tantraphol of the Michigan Cannabis Industry Association expressed optimism about the decision, stating that the group is fighting against a tax that they believe violates the state constitution and the voter-approved initiative that established the legal recreational marijuana industry in 2018.
The tax in question, a 24% wholesale tax, was introduced by the Legislature and signed into law by Governor Gretchen Whitmer as part of a road funding agreement. The lawsuit filed by the cannabis industry argues that this tax is unconstitutional as it adds to the existing retail tax and regulations set forth by the voter initiative, which can only be altered by supermajority votes in the Legislature.
On the other hand, the state contends that the new cannabis tax is lawful as it falls under a road funding law and does not interfere with the language of the voter initiative. The Michigan Treasury, named as the defendant in the case, declined to comment on ongoing litigation, mentioning that businesses will pay the tax quarterly, with billing and payment details still being finalized.
