Frequently Asked Questions
Can a wholesaler reimburse itself the incidence of the tax from the retailer? Who does the wholesale marihuana tax apply to?
Beginning January 1, 2026, Michigan will impose a 24% wholesale tax on the “wholesale price” of certain sales or transfers of recreational or “adult-use” marihuana. (from blue box on landing page) The tax will apply to (a) the first sale or transfer of marihuana from a marihuana wholesaler to a marihuana retailer, (b) marihuana cultivated and processed for retail sale by a marihuana retailer itself (e.g., microbusinesses), and (c) sales or transfers of marihuana from medical marihuana provisioning centers to marihuana retailers.
Does the wholesale marihuana tax only apply to the first sale or other transfer from a wholesaler to a retailer?
Yes. The imposition of the tax on the “first sale or transfer” to a retailer and precludes the possibility the same product will be taxed multiple times, at different points in the chain of production. For example, the wholesale tax would not be imposed on a transfer of adult-use marihuana from a grower or cultivator to a processor, because that transaction does not represent the “first sale or transfer” to an entity licensed to make retail sales of adult-use marihuana.
Which entity, the wholesaler or the retailer, is legally responsible for paying the Wholesale Marihuana Tax and remitting it to the Michigan Department of Treasury?
The statute provides that the new 24% wholesale tax is imposed on the wholesaler – the “marihuana establishment” that makes the first sale or transfer of marihuana to a retailer. That entity is legally responsible for paying the tax on all applicable transactions, as well as remitting the tax to Treasury.
Are shipping charges included in the wholesale marihuana taxable amount?
Yes. For transactions between non-affiliated entities, the statute states that the “wholesale price” (to which the tax is applied) “includes any tax, fee, or other charge reflected on the invoice, bill of sale, purchase order, or other document evidencing the sale or transfer of the marihuana.” See Sec. 3(m)(i)
Does the new 24% Wholesale Marihuana Tax apply in addition to other taxes imposed on adult-use marihuana?
Yes, the new Wholesale Marihuana Tax applies in addition to the existing 10% excise tax on retail sales of adult-use marihuana, and the 6% state sales tax imposed on all non-exempt sales of tangible personal property, but at a different stage of the supply chain. The 10% excise tax and the 6% sales tax are applied at the time of retail purchase and are imposed on the retailer. Conversely, the new wholesale tax is applied on the transaction between the wholesaler and the retailer
If an Adult Use Processor buys bulk distillate from another Adult Use Processor, will there be an additional 24% tax?
No, this transaction would not be subject to the 24% wholesale marihuana tax because it does not represent the first sale or transfer from a wholesaler to an entity licensed to make retail sales of adult-use marihuana.
How does the 24% wholesale tax affect medical marihuana cultivation to medical marihuana retailer?
The wholesale marihuana tax does not apply to wholesale sales of medical marihuana, only to wholesale sales of adult-use or recreational marihuana. The only exception is the transfer, by a dual license holder, of product from medical marihuana inventory to adult-use inventory; the 24% wholesale tax does apply to these transfers.
If my business holds dual licenses as both a medical marihuana provisioning center and a retail seller under MRTMA, can I avoid the new wholesale tax by making regular daily transfers of marihuana from my medical marihuana inventory to my adult-use marihuana inventory, or making transfers from medical inventory to adult-use inventory concurrently with each retail sale of adult-use marihuana to an individual?
No. The 24% Wholesale Marihuana Tax will legally apply to every transfer or sale of marihuana between the provisioning center side of your business, and the retail sale side of your business, regardless of the timing or frequency of those transfers. All transfers of marihuana product are required to be tracked in the METRC system.
