Whitmer's proposed weed tax worries Detroit's budding industry
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Local cannabis dispensaries are voicing concerns over Gov. Gretchen Whitmer's new tax proposal on weed.
The big picture: On Monday, Whitmer rolled out a new $3 billion plan to fix the roads that includes a tax hike on cannabis that's raising concerns about the industry in Michigan.
Zoom in: Jay Snipes of West Coast Meds on the city's west side tells Axios that higher taxes on cannabis will force some shops to close.
- "The whole point of the cannabis industry is to create generational wealth for the smaller businesses within the community and create jobs within the community. But you'll see them begin to close if they add any taxes because we're already hurting," Snipes says.
State of play: The industry has exploded in Michigan since voters legalized cannabis for recreational use in 2018. But fierce competition and government regulations have made staying in business difficult for some local shops.
By the numbers: The state's industry sold more than $3.29 billion in cannabis last year, a 7.6% increase over 2023, Crain's reported, citing data from the Michigan Cannabis Regulatory Agency.
- Of that, more than $371 million was sold in Wayne County alone.
- Detroit currently has 56 state-licensed cannabis shops.
Driving the news: Whitmer's plan also includes higher taxes on other businesses, such as Amazon and TikTok, but specifics on how they would be implemented remain scarce.
Between the lines: A press release from the governor's office says the plan "will close a loophole that exempted the cannabis industry from wholesale tax," generating $470 million for road repairs.
- Early indications suggest the plan would drive more customers to buy cannabis illegally, Robin Schneider, executive director of the Michigan Cannabis Industry Association, told the Detroit News.
The latest: Axios inquired, but the governor's office did not have new details about its plan Tuesday.
- Whitmer left the country on a trade mission to the United Arab Emirates and Bahrain.
What they're saying: Narmin Jarrous, chief development officer at Exclusive Brands, says she "is not diametrically opposed" to an additional tax.
- "If we can add more to our Michigan community, we absolutely want to," Jarrous tells Axios. "It's sometimes difficult to convince people that imposing additional taxes while businesses are suffering — partly due to current regulations — it's not the easiest pill to swallow."
What's next: The governor's office and state lawmakers will negotiate to hammer out final details of a road funding plan.