Politics
Michigan GOP Lieutenant Governor Candidate Files Bill To Suspend Marijuana Tax Increase
The Republican nominee to be Michigan’s next lieutenant governor has filed a bill in the state legislature that would suspend a recently enacted marijuana tax increase.
Rep. Jay DeBoyer (R) introduced legislation this week that would make it so that a new 24 percent wholesale cannabis tax that was enacted by Gov. Gretchen Whitmer (D) and the legislature to raise money for road and bridge repairs would not be “levied or imposed” for a period of one year.
“The road funding plan that taxed marijuana was created and signed in haste by the Whitmer administration to generate revenue, and we’ve seen the impacts of that haste,” DeBoyer said in a statement last week before formally filing his bill on Wednesday. “The tax is generating tens of millions of dollars less in revenue than what was projected and there’s no enforcement agency to collect it.”
“It’s also driving the marijuana industry back into the black market and forcing business owners who are following the law to compete with nefarious actors,” he said. “This is a lose-lose.”
“I supported the original legislation at large for needed road funding, but I was always skeptical to impose a tax with no mechanism to collect it. The problems with that were clear,” DeBoyer said. “This pause is needed to reevaluate the future effectiveness of the tax. Otherwise, it’s a useless tax and the state is forcing local businesses to pay for a policy that isn’t working as intended. This should be addressed.”
DeBoyer’s gubernatorial running mate, John James, has stated his support for repealing or significantly rolling back the cannabis industry tax hike.
While the Michigan Cannabis Industry Association (MiCIA) has endorsed James due to that stance, a Democratic senator recently told Marijuana Moment that the GOP candidate “has not been a friend to legalization”—citing comments from 2018 when he said he would “personally be voting no” on the ballot initiative that ultimately legalized recreational cannabis in the state that year.
Sen. Jeff Irwin (D) also argued that DeBoyer “has been even worse on cannabis issues.”
The Republican lieutenant governor candidate filed legislation this session to cut the number of Michigan medical cannabis caregivers can grow for patients in half, from 12 to six, while limiting the numbers of caregiver registrations per physical address to just one.
Robin Schneider, MiCIA executive director, said in a press release on Thursday that the group is “grateful to Rep. DeBoyer for recognizing the damage this tax is doing and for stepping up with a practical way to stop it while we work toward a real solution.”
“The 24 percent tax on cannabis isn’t fixing the roads, but it is destroying Michigan businesses,” she said. “A 12-month pause will give what’s left of our cannabis businesses time to stabilize and keeps customers in the regulated market, instead of driving them to the illicit market.”
James’s Democratic opponent for governor, Jocelyn Benson, meanwhile, has not taken a clear stance on the cannabis tax.
It’s a “new and emerging issue,” she said recently.
“There’s a lot of data yet to be determined on that particular tax… We need to know where the money is going and also the impact that it’s had on the industry,” she said. “At the same time, I want to make sure that any changes we are making to our tax code do not come at the expense of driving up costs for Michiganders.”
James, for his part, said in a plank of his “Freedom Agenda” unveiled in August 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.
Another Republican state representative recently filed legislation 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), the sponsor of the repeal bill, 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.
Photo courtesy of Mike Latimer.
