A state senator representing Hillsdale County has proposed a bill to roll back Michigan’s recent tax increase on cannabis sales, gaining support from local sellers.

State Senator Jonathan Lindsey (R-Coldwater) introduced Senate Bill 810 on Feb. 26. The one-sentence bill would fully repeal the Comprehensive Road Funding Tax Act, which enacted the 24% wholesale excise tax on cannabis. 

The state recently distributed last year’s cannabis sales revenue of $94 million to 313 of its local government entities, a slight decrease from the prior year’s $99 million. The City of Hillsdale will not receive any funds, having outlawed the sale and public use of marijuana in city limits in 2018.

Before the recent increase, the state imposed an excise tax of 10% and a sales tax of 6%. The additional 24% tax on cannabis went into effect on Jan. 1, and sellers say they are beginning to feel its effects.

Isabel Reed, a manager at First Class, a cannabis dispensary in Camden, said she fears future layoffs due to a loss of revenue.

“At some point, cutting labor will be our only option,” she said. “We’re trying to avoid it for now, but it will only last so long.”

When employees at First Class and other state dispensaries appealed to their representatives to stop the tax, Reed said, their voices were not heard.

“We all went to the Capitol, we protested, and really stumped for the cause, and it’s disappointing not to see that work out,” she said. “There were a lot of people. And we got to connect with everyone else from the industry too: growers, processors, retail. So it was really cool to see everyone come together. There were a couple of us running the store, but most of us tried to go at least some of the days.”

State senator Joseph Bellino told WRFH in January that eliminating the tax would improve the cost of living for his constituents.

“Take away the 24% tax on marijuana,” Bellino said. “Why do we need it? ‘Oh, we need it to fund roads.’ Well, the money you think you’re going to get from marijuana is not going to happen. We’re bringing tax dollars in from Ohio, but when we raise the tax 24%, we’re not going to get those tax dollars. Pure economics tells us it was a bad decision.”

Tyler Whitelaw, the manager of Stoned Goat Cannabis in Osseo, said the excise tax goes against the Constitution. 

“Honestly, I believe it’s completely unconstitutional. It is taxation without representation and it needs to be repealed purely on that fact alone,” Whitelaw said. “It’s also caused damage to the cannabis industry. There’s not a store in the state that hasn’t seen a loss in either customers or just flat out people not buying as much because everything costs more.”

Over the next couple of months, Reed said, she expects customers to change their buying habits.

“I have people who are almost 100 years old coming in to just get a topical,” Reed said, referring to cannabis-infused lotions, balms, and patches. “They just want a quality product. But what will end up happening is a lot of people won’t want to pay the tax, so they will stick with some of the cheaper brands, and then those cheaper brands will end up taking over the market. I mean, this just opens up the black market again. It’s pretty easy to see that when you ask people to pay more, they will go where they’re not going to be taxed so high. Basic economics.”

Bree Cooper, a field marketer for Mitten Extracts, a Michigan cannabis company, said prices will eventually rise, but companies are trying to eat the costs as long as possible.

“So luckily, with my brand, we actually covered the tax for January and February, so we haven’t noticed a whole lot yet,” she said. “I don’t know what the future really holds for that, though.”

Cooper said she supports eliminating the tax as a solution.

“I definitely support rolling it back,” she said. “There are no positives. There’s nothing good that can come from this. It’s just going to raise prices for purchasers, which is then going to raise prices for customers.”

Ultimately, Reed said, the tax was a step backwards.

“I’ve been in industry almost 10 years, so I’ve seen it go from medical to this,” Reed said. “We’re still doing better than we were 10 years ago, but it sucks to go backwards. The whole point of cannabis is community-based. So to have prices go up for people who really need medicine, that’s really hard to see.”