By Craig Mauger, cmauger@detroitnews.com<\/p>\n
A Michigan judge ruled against marijuana businesses in the state Monday, rejecting their arguments that a new 24% wholesale tax on their products, imposed by the Legislature as part of a road-funding deal, should be immediately blocked.<\/p>\n
The Michigan Cannabis Industry Association has contended that the new tax should have required\u00a0supermajority support from lawmakers\u00a0during votes in October, which it didn\u2019t get, because the policy amends a ballot proposal that voters approved in 2018 to legalize recreational marijuana and set a 10% tax on retail sales.<\/p>\n
However, Court of Claims Judge Sima Patel said in her 28-page decision Monday that the new wholesale tax bill was \u201cconsistent\u201d with the text of the ballot proposal, which recognized \u201cother taxes.\u201d<\/p>\n
\u201cPlaintiffs have not met the stiff burden of demonstrating that they will likely succeed on the merits,\u201d Patel wrote of not granting a preliminary injunction against the new law.<\/p>\n
For now, her ruling allows the new 24% tax to go into effect Jan. 1.<\/p>\n
But it wasn\u2019t an outright victory for the Legislature and Gov. Gretchen Whitmer\u2019s administration.<\/p>\n
Patel said there \u201cremain questions of fact\u201d whether the 24% wholesale excise tax interferes with the purposes of the 2018 ballot proposal. Patel noted the businesses had argued that voters \u201cpurposefully selected the 10% excise tax on retail sales to keep retail prices reasonable\u201d and to diminish the illicit market.<\/p>\n
\u201cDiscovery will be required to develop the evidence needed to support the parties\u2019 positions in this regard,\u201d Patel wrote, rejecting the state\u2019s pursuit of a summary judgment against the businesses on the matter.<\/p>\n
Patel set a scheduling conference for Jan. 13 but referenced \u201cthe high likelihood that both parties will seek an appeal to the Court of Appeals.\u201d Whitmer appointed Patel to the Court of Appeals\u00a0in 2022.<\/p>\n
In reaction to the decision, Rose\u00a0Tantraphol, spokeswoman for the Michigan\u00a0Cannabis Industry Association, said the organization plans a \u201cswift appeal.\u201d<\/p>\n
\u201cWe don\u2019t believe the Court of Claims made the right call,\u201d Tantraphol said. \u201cWhile we are deeply frustrated by this ruling, I can tell you this: The fight is far from over.\u201d<\/p>\n
The wholesale tax was at the center of a road-funding compromise that ended a months-long budget standoff between Democrats and Republicans in the Capitol in October.<\/p>\n
The nonpartisan Michigan House Fiscal Agency has projected the wholesale marijuana tax would create about $420 million in additional revenue for roads annually.<\/p>\n
Under the state Constitution, to amend a voter-approved policy, three-fourths of the lawmakers in the House and Senate would have to support the change. While the new wholesale tax wasn\u2019t added directly to the voter-approved law, the lawyers argued the tax\u2019s passage effectively amended it.<\/p>\n
The 24% new tax didn\u2019t get three-fourths support in the House or Senate. In the Senate, only 19 of the 37 lawmakers supported it.<\/p>\n
The Michigan Cannabis Industry Association represents about 400 licensed marijuana businesses. Last year, Michigan\u2019s recreational marijuana retail sales came in at about $3.2 billion, according to\u00a0monthly reports from the Cannabis Regulatory Agency.<\/p>\n","protected":false},"excerpt":{"rendered":"By Craig Mauger, cmauger@detroitnews.com A Michigan judge ruled against marijuana businesses in the state Monday, rejecting their arguments…\n","protected":false},"author":2,"featured_media":87186,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[387,181,23,795,100,143,145,144,13],"class_list":{"0":"post-87185","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-oakland","8":"tag-business","9":"tag-latest-headlines","10":"tag-local-news","11":"tag-michigan","12":"tag-news","13":"tag-oakland","14":"tag-oakland-headlines","15":"tag-oakland-news","16":"tag-politics"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/87185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=87185"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/87185\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/87186"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=87185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=87185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=87185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}