Tag: legalized marijuana

24% Michigan marijuana tax, a key piece of the legislative budget deal, has passed

After much hand wringing and consternation from lawmakers who feared detrimental effects to Michigan’s cannabis industry, the Michigan Senate voted early Friday morning by a thin margin to pass a 24% wholesale tax on marijuana products sold in the state.

The measure is estimated to raise $420 million in new revenue to fund road repairs and construction in the new fiscal year, a key component of the budget deal reached by Gov. Gretchen Whitmer, House Speaker Matt Hall (R-Richland Township) and Senate Majority Leader Winnie Brinks (D-Grand Rapids).

If the vote had failed, the entire deal would more than likely fall apart, sending the respective chambers and the governor’s office back to the negotiating table. Such a development would have also sent the state into a full government shutdown. House leadership said Thursday that it would not entertain another continuation budget after the one passed Wednesday expired after Oct. 8.

Although many members of the cannabis industry rallied at the Capitol and lobbied lawmakers against passing the legislation, the implications of the entire deal falling through weighed heavily on the Legislature’s mind.

The House and Senate on late Thursday and early Friday morning passed their respective conference budgets to fund the whole of government, K-12 schools and higher education, but all of that hinged on passage of the marijuana tax.

The bill passed by a slim 19-17 vote, which had nearly as much bipartisan dissent as it did support.

Brinks and the following senators voted in favor of the bill: Sarah Anthony (D-Lansing), Rosemary Bayer (D-West Bloomfield), Darrin Camilleri (D-Trenton), Mary Cavanagh (D-Redford Township), Stephanie Chang (D-Detroit), John Cherry (D-Flint), Kevin Daley (R-Lum), Erika Geiss (D-Taylor), Veronica Klinefelt (D-Eastpointe), Dan Lauwers (R-Brockway), Ed McBroom (R-Vulcan), Sean McCann (D-Kalamazoo), Mallory McMorrow (D-Royal Oak), Jeremy Moss (D-Bloomfield Township), Dayna Polehanki (D-Livonia), Sam Singh (D-East Lansing), Roger Victory (R-Georgetown Township) and Paul Wojno (D-Warren).

Sen. Jeff Irwin (D-Ann Arbor) voted no against the bill. He was one of the legislation’s strongest opponents. 

Irwin was joined by Sens. Thomas Albert (R-Lowell), Joseph Bellino (R-Monroe), Jon Bumstead (R-North Muskegon), John Damoose (R-Harbor Springs), Roger Hauck (R-Mount Pleasant), Kevin Hertel (D-Saint Clair Shores), Michele Hoitenga (R-Manton), Mark Huizenga (R-Walker), Ruth Johnson (R-Groveland Township), Jonathan Lindsey (R-Coldwater), Senate Minority Leader Aric Nesbitt (R-Porter Township), Jim Runestad (R-White Lake), Sylvia Santana (D-Detroit), Sue Shink (D-Northfield Township), Lana Theis (R-Brighton) and Michael Webber (R-Rochester Hills).

A large portion of the day was spent debating the measure in caucus meetings and whipping votes to ensure the tax did not go up in smoke.

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California Governor Signs Bill To Integrate Hemp And Marijuana Markets After Banning Intoxicating Cannabinoids Outside Of Dispensaries

The governor of California has signed a bill to integrate intoxicating hemp products into the state’s existing marijuana market—an attempt to consolidate the cannabis industry and prevent youth access to unregulated hemp.

After the legislation from Assembly Majority Leader Cecilia Aguiar-Curry (D) passed the Senate last month, Gov. Gavin Newsom (D) signed it into law on Thursday.

“We are continuing to place the safety of every Californian first,” Newsom said. “For too long, nefarious hemp manufacturers have been exploiting loopholes to make their intoxicating products easily available to our most vulnerable communities—that stops today.”

This follows the governor’s emergency order last year that outright prohibited hemp products with any trace amounts of THC from being sold, which industry stakeholders warned would devastate the marketplace.

Under the newly signed bill, intoxicating hemp products that meet certain regulatory requirements would be able to be sold at licensed cannabis retailers with age restrictions and testing rules. But it’s unclear how that might ameliorate the hemp industry’s concerns, when adults and patients go to a store with the option to buy a broader array of marijuana products.

“Bad actors have abused state and federal law to sell intoxicating hemp products in our State. As the author of legislation that allowed the legal sale of non-intoxicating hemp CBD products, this is absolutely unacceptable,” Aguiar-Curry said. “AB 8 is a result of years of collaboration with this Administration, and I appreciate the Governor’s signature.”

“Our first job is to protect our kids and our communities,” she said. “With this bill, we’ll have responsible regulation, increase enforcement, and support struggling legal cannabis businesses against criminal competition.”

Nicole Elliott, director of the Department of Cannabis Control (DCC), said the legislation represents “a critical step forward for California’s cannabis industry and for consumer safety.”

“By closing loopholes around intoxicating hemp products and bringing them under the same strict rules as cannabis, this legislation protects consumers, ensures fair competition for licensed businesses, and strengthens the integrity of our regulated marketplace,” she said. “AB 8 makes it clear that all intoxicating products must be held to the same important standards Californians expect.”

The key provisions of the law take effect in January 2028, mandating that consumable hemp products with cannabinoids other that CBD must comply with the state’s current medical and recreational marijuana laws.

A Senate analysis of the bill released last month said the measure would ban the sale of “synthetic cannabis products and inhalable cannabis products containing cannabinoids derived from hemp,” place restrictions on incorporating raw hemp extracts into foods and beverages and expand “the authority for state and local enforcement agencies to inspect, seize, and destroy unlawful cannabis products.”

This all follows Newsom announcing emergency regulations last year to outlaw hemp products with any “detectable amount of total THC.” Under that move, hemp products that don’t have THC are also limited to five servings per package, and sales are restricted to adults 21 and older.

The proposal came less than a month after the state legislature effectively killed a governor-backed bill that would have imposed somewhat similar restrictions on intoxicating hemp-derived cannabinoids.

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Oregon Marijuana Business Files New Lawsuit Challenging Ban On Interstate Cannabis And Hemp Commerce

An Oregon marijuana business has filed a new federal lawsuit against the state, challenging the constitutionality of laws prohibiting interstate cannabis commerce.

After filing an initial suit in 2022—and later withdrawing it amid expectations of unspecified “big things” coming—the cannabis wholesaler Jefferson Packing House (JPH) filed a revised complaint on Wednesday with the U.S. District Court for the District of Oregon.

The latest suit is lengthier than the original, and it makes additional arguments about the alleged illegality of state laws barring marijuana and hemp businesses from exporting products across state lines.

At issue in the case is the Dormant Commerce Clause (DCC) of the U.S. Constitution, which generally prevents states from imposing restrictions on interstate commerce in order to ensure competitiveness in the open market.

While marijuana remains federally illegal, the plaintiffs assert that the DCC still precludes Oregon from imposing trade restrictions between states.

“Oregon law harms JPH by increasing its operating costs and preventing it from taking advantage of economies of scale,” the filing states, adding that state statute also harms the business with respect to hemp, which was federally legalized under the 2018 Farm Bill.

Barring exports of marijuana and hemp puts JPH “at a competitive disadvantage in the market,” the complaint says, because it can’t source cannabis products from out of state and can’t ship products outside of Oregon, “both of which limit its customer base and ability to offer a complete range of products at the best prices.”

State law “discriminates against interstate commerce by nakedly prohibiting such commerce, without any legitimate, non-protectionist purpose, and is therefore prohibited by the Dormant Commerce Clause of the U.S. Constitution,” it says. “There is no constitutionally adequate reason for Oregon, or any other State, to bar the import or export” marijuana or hemp.

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Oregon Officials Ask Federal Court To Reverse Ruling That Blocked Marijuana Industry Labor Law Approved By Voters

Oregon officials are asking a federal appeals court to reverse a judge’s ruling that struck down a voter-approved law to require licensed marijuana businesses to enter into labor peace agreements with workers and mandate that employers remain neutral in discussions around unionization.

In a filing with the U.S. Court of Appeals for the Ninth Circuit last week, attorneys for Oregon Gov. Tina Kotek (D), Attorney General Dan Rayfield (D) and Oregon Liquor and Cannabis Commission’s (OLCC) Dennis Doherty and Craig Prins urged a review of the “constitutional challenge” to the state law.

The officials previously provided notice that they’d be contesting the U.S. District Court for the District of Oregon decision back in June.

After two marijuana businesses—Bubble’s Hash and Ascend Dispensary—initially filed a lawsuit in the district court challenging the implementation of Measure 119, a federal judge sided with the plaintiffs, finding that the law unconstitutionally restricts free speech and violates the federal National Labor Relations Act (NLRA).

Under the currently paused law, a marijuana businesses that was unable to provide proof of a labor peace agreement could have been subject a denial or revocation of their license.

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California Marijuana Tax Cut Officially Takes Effect, With Planned Increase Delayed Through At Least 2028

Three months into a major marijuana tax hike in California, a new law putting a pause on the increase has officially taken effect.

Gov. Gavin Newsom (D) signed the tax relief legislation from Assemblymember Matt Haney (D) late last month. Now, as of Wednesday, consumers will not be paying the increased excise tax—at least until October 2028.

“We’re rolling back this cannabis tax hike so the legal market can continue to grow, consumers can access safe products, and our local communities see the benefits,” Newsom said at the time of the bill signing.

Haney said that “California’s cannabis economy can bring enormous benefits to our state, but only if our legal industry is given a fair chance to compete against the untaxed and unregulated illegal market.”

“AB 564 helps level the playing field,” he said. “It protects California jobs, keeps small businesses open, and ensures that our legal cannabis market can grow and thrive the way voters intended.”

State officials announced in June that the cannabis excise tax rate would increase from 15 percent to 19 percent on July 1, prompting concern from industry stakeholders and consumer advocates.

Newsom previously supported including a tax freeze in a budget trailer bill, but that didn’t come to fruition. Assembly Speaker Robert Rivas (D) also backed the delay, but Senate President Pro Tempore Mike McGuire (D) reportedly blocked it from the budget legislation.

Before being amended in committee, the newly enacted legislation’s pause of the cannabis tax increase would have been in effect until June 30, 2030. After that, on a biennial basis, regulators would adjust the tax rate “by a percentage that will generate an amount of revenue that would have been collected pursuant to the cultivation tax imposed prior to its discontinuation, as specified, not to exceed 19 percent,” according to a summary.

The Senate Appropriations Committee, however, moved to shorten the period that the reduction will be in effect, to October 2028.

The new law will make it so the California Department of Tax and Fee Administration (CDTFA), working with the Department of Finance, will be required to “adjust the cannabis excise tax rate upon purchasers of cannabis or cannabis products” based on the “additional percentage of the gross receipts of any retail sale by a cannabis retailer that the department estimates will generate an amount of revenue equivalent to the amount that would have been collected in the previous fiscal year,” the text says.

The department will need to “estimate the amount of revenue that would have been collected in the previous fiscal year pursuant to the weight-based cultivation tax” and “estimate this amount by projecting the revenue from weight-based cultivation taxes that would have been collected in the previous calendar year based on information available to the department.”

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Michigan Marijuana Industry Rallies Against Tax Hike Proposal That’s Advancing In The Legislature

The proposed new wholesale tax on marijuana products to fund road repairs in the next state budget and years down the road is much too high and would result in job losses for a booming Michigan cannabis industry, advocates and lawmakers said Tuesday as they rallied for a lower tax rate.

At least two Democratic lawmakers who attended the rally—state Reps. Donavan McKinney of Detroit and Mike McFall of Hazel Park—also signaled that they were working behind the scenes to get that rate much lower before a final vote is taken.

At present, both McFall and McKinney said they would vote no on the final budget if the rate remained.

Michigan lawmakers reached a loose framework to fund the government last week, but it included a new 24 percent wholesale tax on products sold at dispensaries across the state. That sent the cannabis industry and their allies into a frenzy as they warned that such a tax would hamstring the industry’s growth and result in fewer jobs.

On Tuesday afternoon, lawmakers were still in the throes of hammering out a final budget plan, with no clear end in sight despite signals that the government would stay open and not shut down on Wednesday when the new fiscal year begins (though by the end of the day lawmakers passed a temporary budget extension through October 8).

Still, the money for the Legislature’s road funding plan had to come from somewhere, whether that was from schools—which advocates rallied against Tuesday—or from the new proposed tax on pot for potholes.

Those working for or on behalf of the cannabis industry gathered for a rally on the Capitol steps in Lansing to send lawmakers and Gov. Gretchen Whitmer (D), who had earlier in the year proposed a more than 30 percent tax, a clear message: Keep off their grass.

“Our industry is not their piggy bank. Our wallets are not their budget overruns,” said Mike DiLaura, CCO and general counsel for House of Dank, one of many cannabis companies operating in Michigan. “It is our time, not just as an industry, but as citizens of this great state, to put our feet down and say, ‘enough is enough.’”

DiLaura continued by saying that the industry has, since recreational cannabis was legalized in 2020, raised nearly $2 billion in taxes for Michigan over the last five years.

“But they say it’s not enough,” DiLaura said. “When will it ever be enough?”

Several other advocates and industry leaders spoke at the rally, all mentioning that even if they lost the battle to either stop the tax hike or reduce it, they would continue the fight in court or seek a full repeal of the law down the pike.

The rally also featured two allies in McKinney and McFall.

Both said they voted against the proposal in House Bill 4951 when it passed the House last week, noting that their communities have greatly benefited from recreational cannabis shops and associated businesses like grow operations.

“Hazel Park was all in on marijuana from the very beginning. As some of you might know, we even gave Tommy Chong the key to the city at one point,” McFall said. “But what a lot of people don’t realize is how this is going to impact local municipalities. They’re talking about cutting revenue sharing, which is the money that goes back from the state. This is also going to impact that.”

McFall said Hazel Park got half a million in tax dollars last year, and that money helped pay for emergency services and other amenities.

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German Government Report Shows Marijuana Legalization Hasn’t Increased Youth Use Or Traffic Accidents

German officials have released a report on the impact of the nation’s marijuana legalization law, finding that fears from opponents about youth use, traffic safety and more have so far proved largely unfounded. However, the illicit market has not meaningfully diminished under the limited legal regulatory model that has been rolled out in the country to date.

The interim report, which was required under the cannabis law enacted last year, assessed a series of health, public safety and economic factors associated with the end of prohibition.

Among the most notable findings in the document published on Monday is the fact that youth marijuana use has continued to decline, even after possession and home cultivation were legalized for adults and social clubs offering access to members opened.

Further, “no clear changes in the previous trend in cannabis consumption among adults could be observed,” the report, conducted on behalf of the federal Ministry of Health, says, according to a translation.

“The percentage increase in adults who have consumed cannabis in the last 12 months, which has been observed since approximately 2011, is likely to continue…without any drastic changes,” it says.

A separate recent study conducted by German federal health officials also found that rates of marijuana use declined among youth after the country legalized adult-use cannabis, contradicting one of the more common prohibitionist arguments against the reform.

Another finding of the new legalization evaluation concerns traffic safety, with researchers determining that there’s been no meaningful change in incidents on the roadways associated with the policy change.

“In the area of ​​road safety, partial legalization has so far shown no significant changes in self-reported driving under the influence of cannabis or in the number of people killed or injured in road traffic,” the report states.

Early data on the impact of legalization on the illicit market indicates that the law has “not yet made a significant contribution to the displacement of the black market intended by the legislature,” the report found.

One reason for the continued presence of the illegal market could be related to how Germany’s legalization law is being rolled out, with a limited number of social clubs that grow cannabis for members to consume—but without a comprehensive commercial industry that could provide wider access to adults. And even if broad retail launches, it may take time to substantially transition consumers to the legal market, which has been the case in Canada and U.S. states that have enacted the reform.

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Michigan Lawmakers Pass Marijuana Tax Increase That’s Projected To Bring In $420 Million In New Revenue Every Year

A plan to raise money for road repairs by increasing marijuana taxes quickly advanced through the Michigan House late Thursday as part of what officials called a larger framework for a state budget deal.

The proposed Comprehensive Road Funding Tax Act would impose a 24 percent tax on the wholesale price of marijuana sold or transferred to a retail shop, beginning in January.

That would generate an estimated $420 million a year, according to the nonpartisan House Fiscal Agency. Most of the funding from the proposed Comprehensive Road Funding Tax Act would go into a new Neighborhood Road Fund for local roads and bridges.

The pot tax proposal passed the Republican-led House with bipartisan support in a 78-21 vote just hours after it was unveiled, with opposition from 10 Republicans and 11 Democrats. It now goes to the Democratic-led Senate for further consideration.

A separate bill approved Thursday—and tied to the pot tax proposal—would extend new federal income tax exemptions on tips and overtime pay to state filers for three years. That would benefit qualifying workers but cost the state more than $150 million annually between 2026 and 2028, according to the fiscal agency.

The votes came shortly before Gov. Gretchen Whitmer, Senate Democratic Leader Winnie Brinks and Republican House Speaker Matt Hall announced a framework agreement to pass the budget before a potential government shutdown next week.

That will include a road funding plan totaling between $1.5 billion and $1.8 billion in annual funding, according to Hall, R-Richland Township.

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Marijuana Industry Group Pushes Congress For Tax Relief—And To Apply The Fix Retroactively For Past Payments

A leading marijuana industry association has released a report calling on Congress to treat cannabis businesses like other lawful industries by allowing them to take federal tax deductions—and also to apply that policy retroactively to provide relief for past payments.

The report from the National Cannabis Industry Association (NCIA) and a coalition of stakeholders states that “no industry understands the pain of taxes as acutely as the state-regulated cannabis industry which currently pays draconian tax rates as a result of the unforeseen consequences of” an Internal Revenue Service (IRS) code known as 280E.

That code precludes even state-licensed marijuana businesses from taking federal deductions for their expenses because cannabis remains a Schedule I drug under the Controlled Substances Act (CSA).

“This provision is a punitive poison pill that threatens every business in these state-regulated markets, but poses a particular threat to small businesses that have responded to the will of voters,” the report says. “Picture the medical dispensary serving veterans with an alternative to deadly opioids or providing comfort to cancer patients in your community: those businesses cannot survive without action to repeal §280E and, crucially, retroactive relief.”

NCIA says the costs of the IRS policy for the cannabis sector are “staggering,” with marijuana businesses paying an effective tax rate of more than 70 percent. That rate “is economically prohibitive, unsustainable, and counter-intuitive,” it says.

“In the cruelest of ironies, the failure to include retroactive relief for state-regulated cannabis businesses will fall primarily on two groups: small cannabis businesses located in early legalization states and equity-owned businesses provided state-licensing priority specifically because of injuries suffered as a result of cannabis prohibition.”

Notably, NCIA stressed that tax relief for the marijuana industry should be applied retroactively. Without that stipulation, the association said “taxes will continue to result in the closure and consolidation of many state-regulated small businesses.”

“Beyond having negative economic impacts, inaction will also harm public health by forcing consumers back to the untaxed, untested, and unregulated illicit market,” it said.

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Legalizing Medical Marijuana Is Linked To Reduced Use Of Tobacco And Amphetamines, New International Study Shows

There’s a “strong negative association” between tobacco use and legal medical marijuana sales, according to a new international study—indicating a “strong potential substitution effect” where people choose to use cannabis where it is allowed instead of smoking cigarettes.

The study, based on data from 20 countries, also found that amphetamine use is “negatively associated” with medical cannabis sales, “suggesting substitution dynamics.”

The researchers additionally concluded that a “well-regulated [medical cannabis, or MC] market can generate sustained economic benefits, emphasizing the need for comprehensive legal frameworks that address licensing, production standards, and access pathways,” adding that “removing barriers to access and enhancing consumer education will support the development of a responsible and sustainable market.”

The analysis also showed “a sustained growth trajectory” in medical cannabis sales after legalization, finding that the policy change is “associated with an average annual increase of 26.06 tons of MC sales in legalizing countries.” After excluding the U.S., which the researchers called “a major outlier in market size,” there was “a slightly lower average effect of 20.05,” which “still supports the persistent market expansion.”

The authors, based in Germany and Lebanon, cautioned that “given the ecological nature of the design, these results should be interpreted as population-level associations rather than individual-level causal effect.”

“Nonetheless, they highlight the potential economic relevance of cannabis legalization in expanding regulated markets and reshaping consumer behavior,” the paper says. “The study contributes to debates on legalization, public health, and economic policy by providing empirical evidence on the associations between legal reforms and market dynamics.”

The study comes amid new research indicating that marijuana use is linked to lower alcohol intake and diminished cravings in heavy drinkers, according to a new federally funded scientific paper.

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