Michigan Cannabis Industry Association claims that the tax would have to either be approved by the voters, or get three-quarters support in the Legislature.
Kyle Davidson of Michigan Advance
The cannabis trade association has filed a complaint against the newly-approved tax by the state on wholesale marijuana sales or transfers, shortly after it was passed into law.
The complaint, which was filed Tuesday with the Michigan Court of Claims, asserts that both the new Michigan marijuana legalization law as well as the process leading to it violate several Michigan Constitutional provisions, including the requirement for amending that law.
In 2018, voters approved Proposal 1 creating the Michigan Regulation and Taxation of Marihuana Act. This legalized recreational marijuana use for individuals over 21. This law imposes an excise duty of 10 percent on marijuana sold commercially.
Michigan Cannabis Industry Association says in its complaint that the current law is exclusive in imposing an excise duty on the sale marijuana. In order to change this voter-initiated legislation, it would need either to receive three-fourths of the vote from the Legislature or to have the approval of the voters.
Michigan House approved the 24 percent tax with 78-21 votes, 11 of which were not cast. The Senate passed it with a 19-17 vote in an extremely close vote. One member did not vote and there was one vacant seat.
The association claims that the new tax cannot be imposed because the 24-percentage was not enacted by a separate legislation and it did not receive the support of three-quarters of the members in the 138-member Legislature.
Association also claimed that the title was misleading, and the purpose of the policy had been unlawfully changed before the final version of the legislation approved. The policy went from creating a fund to replace revenue and for roads without any taxes, to imposing an excise duty of 24 percent on wholesale marijuana prices.
This group also alleges that the new law is in violation of the contracts clause of the Constitution.
Michigan Cannabis Industry Association (MCIA) has asked for a declaration of judgment declaring that the new tax act is invalid and ineffective, along with an injunctive order preventing state officials from enforcing it.
Ron Leix, spokesperson for the Department of Treasury in an email sent Wednesday morning said that the Department had not received the complaint and did not have a comment.
The original publication of this story is Michigan Advance.