Politics
Michigan GOP Governor Candidate Pledges Huge Tax Cut For Marijuana Industry, Along With Crackdown On Hemp Products
The Republican Party’s nominee for governor of Michigan is promising to repeal or significantly roll back a recently enacted tax hike on the marijuana industry if he is elected in November. He also wants to crack down on sales of unregulated hemp THC products.
Last year, lawmakers and Gov. Gretchen Whitmer (D), who is term-limited and cannot run again this year, enacted a new 24 percent wholesale cannabis tax.
Industry advocates have argued that the levy—which is added on top of an existing 10 percent excise tax and 6 percent sales tax on marijuana purchases—increases the cost of doing business for legal operators and makes it harder for them to compete with the illicit market.
GOP gubernatorial candidate John James agrees, saying in a plank of his “Freedom Agenda” unveiled this week that the cannabis tax “drives up prices, gives illegal operators a competitive edge, and has already fallen far short of revenue projections.”
“As Governor, I will work to repeal or sharply reduce it,” he said.
“Michigan voters approved a legal, regulated cannabis market in 2018,” James said. “State government has a responsibility to respect that decision while promoting workplace and community safety, keeping intoxicating products out of the hands of children, protecting consumers, and enforcing the law against those who refuse to follow it.”
To that end, the Republican candidate also says he wants to stop sales of hemp THC products that are widely available.
“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,” his plan says. “Intoxicating products belong in the regulated market—not next to the candy bars.”
Additionally the GOP gubernatorial contender wants to “aggressively target illegal trafficking, unlicensed operators, sales to minors, tax evasion, and product diversion—while letting law-abiding businesses operate without unnecessary interference.”
He cited Chinese-linked illegal cannabis grows that he said operate in the state.
“As Governor, we will end these illicit grow operations and cut off the CCP’s foothold in Michigan,” James said.
Finally, he wants to have the state’s Cannabis Regulatory Agency (CRA), which oversees the legal marijuana market, focus on “real enforcement, consumer and workplace safety, and protecting kids.”
James wants to “eliminate rules that burden compliant businesses without improving public safety, and give the agency the tools to hold unlicensed operators accountable,” he said.
James’s marijuana tax pledge is being touted by the Michigan Cannabis Industry Association.
Meanwhile, a Republican state representative filed legislation last month that would reverse the cannabis wholesale tax.
The tax was projected by state officials to raise $420 million, with the revenue aimed at funding road repairs and construction, though Rep. James DeSana (R) says it is generating in less than half of what its supporters anticipated.
The levy has been challenged in court through lawsuits filed by the cannabis industry.
Meanwhile, earlier this year, the Michigan Cannabis Regulatory Agency announced it is distributing nearly $100 million in marijuana tax revenue to over 300 local governments and tribes across the state. The money is intended to support various local infrastructure, education and other programs and services in 313 municipalities, counties and tribal areas.
