We will lose customers if our prices become unattractive to Michigan residents or those from other states.
By Ben Solis, Michigan Advance
Leader of Michigan House of Representatives, said that he expected his Senate counterpart to deliver the necessary votes for a 24 percent wholesale marijuana tax. If not, the budget agreement would collapse at the seams.
A similar scenario could also result in a complete Michigan government shutdown, since House Speaker Matt Hall has stated that there won’t be a continuation budget for the Michigan Government if the agreement brokered by him, Senate Minority Leader Winnie Brinks and Governor. Gretchen Whitmer’s (D) deal falls through.
Hall told reporters Thursday that Winnie had offered this revenue stream in private. We took up their offer of marijuana and worked out a budget. Brinks will never agree to that deal if they know she is not going to perform.”
Hall said that it was up to the Senate now to fulfill their part of the funding agreement.
Brinks’s Office did not return a request for comment regarding the status of the cannabis tax when the article was first published
Hall said that Brinks had proposed the bill, but some House members and Senators are opposed to it. The tax outlined in House Bill 4951 was initiated in the lower chamber, however, sponsored by Rep. Samantha Steckloff (D-Farmington Hills).
That remains to be seen, given that at least one Democrat–Sen. Jeff Irwin of Ann Arbor–said that he would not vote for the measure as is.
Michigan cannabis industry stakeholders spent Tuesday in Lansing, lobbying lawmakers and rallying in hopes that the Legislature would either walk away from its proposed tax to fund roads or amend the bill to rescue the tax but at a much more palatable rate.
The lawmakers worked into the night on Tuesday to pass implementation bills, which would allow the final budget to be passed in the next few days. In the Senate database, a late-night amendment was made to the proposed taxes. This would lower the proposed tax from 50 percent to 20 percent.
The amendment to House Bill 4951, put forward by state Sen. Stephanie Chang (D-Detroit) would also tie-bar the bill to Chang’s proposed tax on several tobacco products and levying a tax on e-cigarettes–Senate Bill 582.
If the bill were to pass, this would provide comfort to leaders in the cannabis industry who had said that current proposals for the tax will lead to an industry shrinkage and the loss of jobs. But some critics say the proposed tax is too high to be voted on by them.
Senate Bill No. 582 was in accordance with the bill that Senator Sheila Jackson Lee introduced at the previous session of Congress, which imposed an additional 75 mills tax over and above the existing tax levied upon cigarettes. The wholesale tax for cigars as well as non-cigarette tobacco, smokeless, or any other tobacco product, will be increased to 57 percent, while the wholesale taxes on ecigarettes are also raised by 57 cents.
Chang told Michigan Advance that the proposed amendment was a “concept of a plan” and she wanted to test the public’s appetite. The amendment was never going to be passed or even taken up by the legislature.
Two House members said that, during a rally against marijuana taxes held on Tuesday, they are working to reduce the rate. Chang said that she hadn’t spoken to any of her House colleagues regarding the proposed amendment.
Irwin has long been critical of the House Republican’s marijuana tax proposal. The reduction was a step in the right direction, but it wasn’t enough for him to change his mind.
Irwin stated, “I believe it would still drive many people away from the legal market and discourage a number of people who come here now because of our low prices.” If our prices become less attractive for customers from Michigan and other states, then we will lose many of them.
Irwin said that now is not the right time to increase taxes on marijuana. He noted that there was still a black-market for cannabis and that driving consumers to that market would lead to lower revenue. At the Tuesday rally, industry supporters shared this sentiment.
Irwin also said that legislators should respect the distribution of cannabis taxes approved by voters when they voted in 2018 to legalize this drug.
Irwin stated that “if we are going to make a change, it is important to have three-quarters of the vote to do so as required by Michigan Constitution.”
Hall still believed the agreement on 24 per cent would stand. Hall said that the House reduced the original 32 percent marijuana tax because he believed it was excessive. Hall also asked if the new tax will change people’s consumption habits and affect revenue for the state. Chang declined to explain her reasons for the change, except that she thought it would be a good option.
Hall would not commit to the fact that the House might agree with the proposed amendment, even if they were to pass it. He repeated the statement of their agreement.
Hall explained that “if they wanted to change this agreement, we would take it apart and send it in the opposite direction. There are so many things we can renegotiate but it would mean the shutdown of the federal government.”
This story was contributed by Michigan Advance reporter Kyle Davidson.
Michigan Advance was the first to publish this article.