Michigan Recreational Marijuana Sales Drop After Tax Hike

Michigan marijuana shops are struggling after the state’s new 24% tax increase. Local dispensaries say they've experienced their worst month of sales ever and are starting to wonder if they'll ever be able to recover.

Here's What We Know So Far:

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I don’t know anyone who enjoys higher taxes, especially on a product that’s already heavily taxed like cannabis. Before January 2026, Michigan buyers paid a 10% retail excise tax plus 6% sales tax. Starting this year, the new Wholesale Marijuana Excise Tax added 24% at the wholesale level.

Of course, that cost ultimately gets passed on to customers.

According to a new report from Detroit's WXYZ, the effects of the new tax are finally hitting local dispensaries. But the sales slump isn’t entirely due to the tax. Local shops say several factors are contributing:

the steep drop is the result of several factors hitting at once: a new 24% tax on recreational marijuana that took effect at the start of the year, harsh winter weather and customers who stocked up before the tax kicked in. --Peter Maxwell, WXYZ

Unfortunately, some local shops believe this is a sign of the year to come. That does not bode well for Michigan marijuana customers! When speaking with cannabis law attorney John Fraser, Fraser told WXYZ he believes we'll see more stores and wholesalers close adding,

For businesses that were already on weak financial footing, having less revenue means less profit and less ability to withstand the downturn

Here in West Michigan we have seen several dispensaries close locally including High Profile on S. Westnedge, Cookies, GAGE, Pinnacle Emporium, and more.