Michigan’s Cannabis Tax Increase (2026): What It Means for Buyers — Including Out-of-State Shoppers

What changed?

Michigan’s Department of Treasury explains the 24% wholesale marihuana tax takes effect on January 1, 2026 and applies to taxable wholesale transactions on and after that date. Revenue is directed to the state’s Neighborhood Road Fund for infrastructure improvements. (Source: Michigan Treasury – Wholesale Marihuana Tax)

Importantly, this new wholesale tax stacks into a market that already includes Michigan’s voter-created 10% excise tax on adult-use sales (created by Proposal 1 in 2018). (Source: Ballotpedia – Michigan Proposal 1 (2018))

Quick timeline: When did Michigan legalize cannabis?

• November 2018: Voters approved adult-use legalization via Proposal 1. (Source: Ballotpedia)
• December 1, 2019: Michigan began legal retail sales for adult-use cannabis. (Source: Michigan Public – Retail sales began Dec. 1, 2019)

The real-world impact for customers

1) Expect more price pressure (and fewer “insane deals”)

A wholesale tax increases the cost structure before a product even hits the shelf. In competitive markets, businesses may absorb some of that cost short-term, but over time it often shows up as:

• Higher everyday shelf prices on popular categories (flower, vapes, edibles)
• Less aggressive discounting (smaller % off, shorter promos, tighter exclusions)
• More “bundle/value” strategies (mix-and-match, tiered pricing) instead of deep single-item cuts

2) Out-of-state shoppers (Wisconsin) may see the buying environment change

For years, Michigan has been a major destination for Midwest shoppers — including Wisconsinites — because access is legal in Michigan but not in Wisconsin. Reporting and analysis has noted that a large share of Wisconsin adults live within a relatively short drive of a legal dispensary across state lines. (Source: PBS Wisconsin – When Wisconsinites buy legal marijuana in neighboring states)

With higher wholesale taxes in Michigan, the “price advantage” that made a cross-border trip feel like a no-brainer could tighten — especially after you add travel time and fuel. That can lead to:

• More planned trips: fewer impulse runs, more “stock-up” behavior
• More value shopping: shoppers comparing menus, chasing bundles, rotating categories
• More sensitivity to promos: deal windows matter more than ever

3) A crucial reminder about crossing state lines

Even if cannabis is legal to purchase in Michigan, transporting it across state lines can create legal risk because interstate transport remains illegal under federal law. (Source: FindLaw – Transporting marijuana across state lines)

This article is for educational purposes and isn’t legal advice.

What smart shoppers can do now

• Shop value, not hype: compare price-per-mg (edibles) or price-per-gram (flower) across options.
• Use timing: promos may get tighter, so shopping during sale windows matters more.
• Watch category shifts: if one category spikes in price, value often migrates to another category.
• Follow market updates: taxes, pricing, and promos can change quickly around major policy shifts.
• JUST SHOP YOUR DISPENSARIES IN WISCONSIN ;)