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Michigan’s Marijuana Tax Experiment Should Be An Urgent Warning To Other States (Op-Ed)

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1 month ago

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“Other states should also learn from Michigan’s experience, rather than repeating the same economic mistake when faced with a budget deficit.”

By Hirsh Jain, Verdant Strategies

In an effort to raise short-term revenue, Michigan recently adopted a cannabis tax structure that is already proving economically counterproductive and strategically short-sighted.

For many years, Michigan was one of the most successful legal cannabis markets in the United States. The explanation was simple. Michigan, understandably, adopted one of the lowest cannabis tax rates in the country.

The state imposed a 10 percent excise tax on adult use, shared between state and local governments, plus a standard 6 percent sales tax, for a total effective rate of 16 percent. By comparison, California’s cannabis tax burden was twice as high, approaching 40 percent in some cities.

The contrast was stark because California and Michigan share deep histories of medical cannabis. California was the first state in the nation to legalize medical cannabis in 1996. Michigan subsequently developed one of the strongest grower-based cannabis markets in the country in the 2000s and 2010s. Both states built strong cultural and political foundations around the idea that cannabis is medicine.

When it came to legalizing adult use, however, the two states went in different directions.

Michigan largely believed that cannabis should be treated as a medicine rather than a vice. He adopted a moderate tax structure that kept legal prices competitive. California, in contrast, imposed heavy taxes and regulatory costs that treated cannabis as a luxury or vice product rather than a therapeutic good.

Predictable results followed.

Michigan’s relatively modest taxes drove consumers out of the illegal market and into licensed stores. Legal sales rose quickly, reaching about $3.3 billion annually in a state of just 10 million people.

California’s market has hovered around $4 billion in recent years, despite nearly quadrupling its population. Per capita, Michigan became one of the strongest adult cannabis markets in America, while California became the weakest, driven by tax policies.

In July 2025, industry analytics firm Headset stated: “What’s so surprising about Michigan’s pace of sales is California’s population difference. With a population of 10 million, Michigan is on the verge of usurping America’s largest state, California, with a population of nearly 40 million.”

Cannabis became a major driver of employment in Michigan. According to industry recruiting firm Vangst, 47,000 Michiganders were expected to work in the industry in 2024, representing a staggering nearly 1 percent of the statewide workforce.

Even more striking, Crain’s Detroit Business reported that cannabis accounted for a staggering 52 percent of Michigan’s private sector net job growth from 2018 to 2024. At a time when many of Michigan’s traditional manufacturing industries have struggled and wage growth has stalled for many workers, cannabis has been the state’s most consistent source of job growth.

Then the tax structure changed.

From January 1, 2026. Michigan enacted a new 24 percent wholesale cannabis tax. This effectively doubled the tax burden on operators at a critical point in the supply chain. The effects were immediate.

According to New Cannabis Ventures, Michigan’s legal cannabis market generated just $226 million in sales in January 2026, the lowest monthly figure since late 2022. Sales fell a sharp 16 percent from December 2025, the month before the tax took effect, and were 8 percent lower than in January 2025.

The situation may worsen in the coming months. Many Michigan dispensaries stocked inventory at the end of 2025, before the tax went into effect, and are still selling product that was not subject to the new wholesale tax.

And even that temporary solution came with compromises. Retail analytics firm Happy Cabbage noted that high-demand items were often in limited supply by the end of 2025, while low-demand items were readily available. As a result, purchasing decisions increasingly reflected what suppliers had available, rather than what customers would buy.

The full impact of the tax increase will become clearer in the coming months as more inventory from the new taxes hits store shelves and higher costs are passed on to consumers.

But already the influence of the industry has been sobering. In January alone, several large operators in Michigan announced crop closures, retail consolidation and layoffs, citing falling margins after the tax hike.

Higher Love Cannabis announced the layoffs of 61 of its 213 employees, explaining that the cuts were necessary to deal with the new tax. C3 Industries said it would close its Webberville cultivation facility and lay off 62 workers, noting that it had warned lawmakers of this outcome if the wholesale tax were enacted. PinCanna put its operations up for sale, citing the new wholesale tax as the reason. The owner of The Greenhouse announced that 30 percent of Michigan dispensaries could close in the next year due to tax increases.

This tax increase is quickly destabilizing perhaps Michigan’s most dynamic job-creating industry in recent history. An unmistakable reminder that cannabis does not operate in a closed legal market. It competes directly with a resilient illegal market with no excise taxes, no compliance costs and no regulatory burden.

This illegal market has operated for decades and can quickly absorb consumers if the price difference is too great. It is an intellectual fantasy to think that when policymakers raise taxes on cannabis, they are adjusting their revenue projections. In reality, market share and financial resources are being shifted to an unscrupulous and often violent illegal market.

Michigan’s early success showed that moderate taxation can expand the legal market and grow revenue organically. His latest shift suggests that aggressive taxation could quickly reverse that progress.

It is critical that other states take notice of what is happening in Michigan right now. In recent months, states such as Maine, Maryland and Minnesota have also increased tax rates on cannabis, hoping to cover several unrelated revenue gaps. But whether policy makers in these states appreciate it yet, these decisions will reduce legal sales and strengthen illegal operators.

In fact, California learned this lesson in the third quarter of 2025 when it raised its already high cannabis tax from 15 percent to 19 percent. Legal sales fell 5 percent from the previous quarter, falling to the lowest quarterly level in more than five years and prompting the state to quickly overturn and reset the tax rate to 15 percent. Michigan ignored this clear economic lesson.

Beyond its economic consequences, overtaxing cannabis runs counter to the spirit and logic of federal reprogramming. If cannabis is formally recognized at the federal level for medical use under Schedule III, states with a long history of medical cannabis should pause and reconsider whether their tax policies adequately reflect and respect their heritage.

Michigan and California pioneered the legalization of cannabis as medicine, creating the conditions for the dramatic shift in national attitudes reflected in the current rescheduling push. Taxing cannabis at rates that exceed those applied to alcohol and tobacco, products that kill hundreds of thousands of Americans each year, betrays this pioneering medical legacy.

If the lessons of reorganization are taken seriously, both Michigan and California should reexamine their punitive tax structures in light of their history.

And states like Pennsylvania and Virginia, which could vote to create new adult-use markets in 2026, also have a clear chance. They can achieve illusory short-term fiscal gains through higher taxes and risk repeating Michigan’s recent mistakes. Or they can design tax structures that support stable businesses, protect jobs, and align policy with the growing acceptance of cannabis.

Michigan’s tax experiment is unfolding, but early signs are troubling. The state still has time to change course, as California did, albeit modestly.

For the sake of the public, tens of thousands of cannabis workers, and the legal market it built, Michigan lawmakers should roll back this tax increase.

Other states should also learn from Michigan’s experience, rather than repeating the same economic mistake in the face of a budget deficit.

Hirsh Jain is the Director of Market Intelligence Green strategiesfinancial services and solutions company providing tax planning and accounting services to many of the nation’s leading cannabis brands and retailers. He is also the principal of Ananda Strategy, a consulting firm based in Los Angeles.

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From photobiology to dynamic lighting strategies in greenhouse production

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17 hours ago

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April 9, 2026

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Greenhouse growers are working in conditions where crop yield and energy use must be managed simultaneously. According to Timo Spruijt, Chief Customer Officer at RED Horticulture, this requires a shift from fixed lighting schedules to approaches based on plant light responses.

“Lighting is moving from static control to measured and predictable strategies,” says Timo. “That starts with understanding how plants react to light and translating that into everyday decisions.”

© RED Horticulture

This approach is based on photobiology, which links plant development to light conditions. Two parameters are central: intensity and spectrum. Light intensity affects photosynthesis, biomass accumulation and yield, while spectrum affects morphology, flowering, rooting and nutritional composition. Paul Vailhen, photobiologist at RED, points out that these factors must be managed together. “Focusing on one parameter without the other limits how plants use light. The interaction between intensity and spectrum determines photon efficiency.”

He explained that growers can use this knowledge to target harvests more precisely. “When photobiology is applied in practice, lighting becomes a management tool rather than a fixed input.”

Three areas
To support this, RED Horticulture organizes its offer around three areas: luminaires, control platform and agronomic orientation. These components are intended to respond to changes during the day and during the cultivation phases. “The needs of the plants are not constant,” says Timo. “Lighting strategies must follow these variations.”

The MyRED platform is used to translate greenhouse data into lighting decisions. Growers can monitor performance and adjust lighting strategies through a dashboard. “The platform allows producers to define and modify their light recipes and evaluate the results,” explains Timo. “It links crop data with energy use.”

He added that implementation goes beyond software. “Support continues after installation. We work with growers to set goals, apply strategies and adjust over time.”

Energy use
Energy use is a major factor in greenhouse operations. Timo connects lighting strategies directly with consumption. “Understanding how intensity and spectrum affect power use helps growers manage their energy input,” he says. “This could lead to changes in the way lighting is applied during the day.”

Automation is also part of today’s greenhouse practices. The system can adjust the lighting throughout the day according to predefined strategies. “Automation reduces manual adjustments and keeps light levels consistent,” says Timo. “It also allows control over the entire light output.”

He noted that automated control can contribute to additional energy savings beyond the performance of the luminaires. “When strategies are applied dynamically, further reductions in energy use are possible.”

Research
This is another part of the research approach. Through the Photobiology and Agronomy Research Center (PARC), RED Horticulture conducts trials under controlled conditions. Timo explains how this relates to commercial production. “Trials allow strategies to be tested before implementation. Producers can then apply these results with a clearer view of expected outcomes.”

The goal is to make photobiology applicable to different crops and growing environments. “The same principles can be adapted to different varieties and production systems,” says Timo. It concludes by returning to the role of knowledge in greenhouse management. “Understanding photobiology is the starting point. From there, growers can build lighting strategies that match crop requirements and energy constraints.”

For more information:
RED Horticulture
World Horti Center
Europe 1
2672 ZX Naaldwijk
+31 174 705 617
horticulture.red/

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Hawaii Lawmakers Approve Bill To Create Psychedelics Task Force Charged With Studying Psilocybin And MDMA

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17 hours ago

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April 9, 2026

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Another Hawaii House committee has passed the Senate-passed bill creating a psychedelic task force responsible for analyzing and making policy recommendations about providing access to breakthrough therapies like psilocybin and MDMA.

The House Finance Committee advanced the legislation to Sen. Chris Lee (D) on a 15-0 vote Tuesday. The measure, which passed the Senate last month by a 24-0 vote, will next go to the House floor before returning to the Senate for that chamber to consider final amendments.

The bill would create Creative Mental Health Therapy, a two-year review of the current scientific literature, supporting additional clinical research and developing policy recommendations for the “safe, ethical, and culturally informed implementation” of a psychedelic therapy program.

“The Legislature believes in addressing the mental health crisis affecting the State’s residents, particularly among veterans, first responders and trauma survivors,” SB 3199 reads. “Suicide remains the leading cause of preventable death, and the State must explore all safe and effective treatment options supported by scientific evidence.”

Given that the Federal Food and Drug Administration (FDA) has designated psilocybin and MDMA as breakthrough therapies in the treatment of serious mental health conditions, which may be subject to future control under the Controlled Substances Act (CSA), Hawaii’s legislation states that the state must “proactively prepare public health, clinical and research systems for safe and equitable implementation.”

The state Department of Health said in House committee testimony that it supports the bill, noting that in light of the FDA’s action on psychedelics, it is “prudent for Hawaii to assess research readiness, regulatory implications, workforce development and culturally informed implementation pathways” before any federal rescheduling of the substances.

The Governor’s Office of Wellness and Resiliency said the bill “has an important opportunity to begin paving a planned pathway for people who need access to life-saving treatments for trauma and other mental health issues.”

“A growing body of research demonstrates that breakthrough therapies (such as MDMA and psilocybin-assisted therapies) demonstrate high efficacy and positive clinical outcomes in the treatment of post-traumatic stress disorder, substance use disorders, end-of-life anxiety, eating disorders, depression, treatment-resistant, and additional conditions in terminally ill patients.”




Team members should include representatives from the State Department of Health (DOH), the Office of the Attorney General, the Office of Wellness and Resiliency (OWR), the University of Hawaii School of Medicine, and more.

Like the draft, the DOH would oversee the task force, an amendment approved by the House Health Committee last month makes the University of Hawaii John A. Burns School of Medicine (JABSOM) the responsible institution, and JABSOM’s nominee as the panel’s chairman.

The commission also adopted amendments suggested by the Department of Law Enforcement to say that its Division of Narcotics Enforcement — and not the Board of Pharmacy — would be responsible for changing the state’s scheduling of psychedelics after any federal reclassification, and to change the deadline for doing so from 90 days to 30 days.

Members note in their bill report that the state Agency for Health Planning and Development has expressed concern that psychedelics are illegal under federal law and that the task force should proceed with caution.

Finally, the panel made technical corrections for clarity, consistency, and style.

If ordered, it appears invoice would be It was first assembled in 2023 based on prior work by a separate psychedelic task force.With a similar goal of exploring avenues for therapeutic access in breakthrough drugs approved by the FDA such as psilocybin.

—
It’s Marijuana Time tracking hundreds of cannabis, psychedelic and drug policy bills in state legislatures and Congress this year. Patreon supporters by pledging at least $25/month, you’ll get access to our interactive maps, charts, and audio calendars so you never miss a development.

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Meanwhile, Hawaii senators recently passed a bill to legalize low-dose, low-potency marijuanathe legislation did not advance the necessary steps before a crucial deadline, so it is dead for the year.

A separate marijuana legalization bill, SB 2421, that contained provisions under federal reform law or amendments to the state Constitution, was delayed for action. The Senate and House panels also delayed action on a measure to sell certain hemp-derived cannabinoid products.

These actions follow Senior lawmakers in the House indicated that proposals to legalize cannabis would not move forward In the 2026 session, citing the lack of sufficient support in their chamber.

Earlier this month, a Hawaii Senate committee unanimously approved legislation to allow patients immediately enter medical cannabis after submitting their recordsinstead of waiting for the cards to be delivered, as is the case under current legislation.

A Senate committee also adopted the resolutions Asking Congress to federally legalize marijuanasupport the state’s efforts to clean up people’s criminal records and take steps to make it easier for cannabis companies to access banking services.

Another Senate panel advanced separate resolutions urging the state attorney general and the health department to seek a waiver from the Drug Enforcement Administration (DEA). Hawaii is allowed to run its cannabis program without federal interference.

user photo Wikimedia/Mushroom Observer.

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Rescheduling appeal process ‘remains pending’ despite Trump’s executive order

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2 days ago

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April 8, 2026

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The Drug Enforcement Administration (DEA) says the marijuana redistricting appeals process “remains pending” despite President Donald Trump issuing an executive order more than three months ago ordering the attorney general to pursue reform “as expeditiously as possible.”

The DEA and reform advocates filed a joint status report Monday on the agency’s interlocutory appeal of bias and improper communications with parties opposed to the redistricting.

“To date, the Movants’ interlocutory appeal to the Administrator on the Motion for Reconsideration remains pending with the Administrator,” said attorneys representing the DEA and cannabis reform advocates who are challenging the process. “No information schedule has been established.”

The agency is responsible for establishing the information schedule. But nearly a year after a former administrative law judge granted the appeal, the DEA is once again delaying the process. This is the fifth consolidated status report, with largely identical language, that the parties have submitted under the administrative litigation order.

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