Politics
Michigan Marijuana Industry Group Endorses GOP Governor Candidate Who Pledged To Cut New Wholesale Tax
A trade association that represents marijuana businesses in Michigan is endorsing the Republican candidate in the state’s gubernatorial election in November, calling him “the clear choice” due to his support for repealing or significantly rolling back a recently enacted tax hike on the industry.
“John James is the clear choice for the cannabis industry,” Michigan Cannabis Industry Association (MiCIA) Executive Director Robin Schneider said in a press release on Wednesday, referring to the GOP candidate.
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.
James, the Republican Party’s nominee for governor, agrees, saying in a plank of his “Freedom Agenda” unveiled last month 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.
Schneider, from the Michigan cannabis trade association, said on Wednesday that “John has taken the time to meet with MiCIA members to better understand the serious financial challenges we face due to the unconstitutional 24 percent cannabis tax established last year.”
“He has released clear statements about this stance on cannabis, and he has been fully transparent,” he said. “We welcome his vocal and committed support of our industry.”
James’s Democratic opponent for governor, Jocelyn Benson, has not taken a clear stance on the cannabis tax.
It’s a “new and emerging issue,” she said this month.
“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.”
Schneider, from MiCIA, said that the cannabis industry, “which has been an economic driver for Michigan, now faces a devastating financial reality.”
“We need a leader who will boldly support the cannabis industry and fight for our workers and our businesses,” he said. “John understands that the unlawful 24 percent tax pushes customers to the illicit market, and he has vowed to repeal or sharply reduce the tax. He pledges to work to eliminate rules that burden compliant businesses while promoting workplace and community safety, keeping intoxicating products out of the hands of children and protecting consumers.”
James, for his part, has also said he wants to crack down on sales of unregulated hemp THC products.
“Michigan voters approved a legal, regulated cannabis market in 2018,” his campaign website says. “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.
Meanwhile, a 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) 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.
