Cannabis News
Michigan’s Marijuana Tax Experiment Should Be An Urgent Warning To Other States (Op-Ed)
Published
3 weeks agoon
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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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Cannabis News
Retrofit or rebuild? How to decide for your greenhouse
Published
21 hours agoon
March 19, 2026By
admin
Many greenhouse operations are based on structures built decades ago. While these facilities can sustain production for years, rising energy costs, evolving crop demands and advances in climate control are prompting growers to reassess whether they need to renovate existing structures or invest in new construction. The decision depends on balancing performance, cost and long-term operational goals.
© Ceres Greenhouse Solutions
Start with the structure: Is your greenhouse still functional?
The first step is to assess the integrity of the structure. A sound frame and foundation often supports modern upgrades, making upgrading a viable option. Plants should check for corrosion, aging materials and structural damage, as well as whether the building can handle newer systems such as energy curtains or lighting. Design factors, including roof height and truss spacing, also affect airflow and system integration. If the structure remains strong and adaptable, remodeling can significantly improve performance without completely replacing it.
© Ceres Greenhouse Solutions
Common problems that greenhouse construction can solve
Older greenhouses often struggle with consistent climate control, resulting in erratic temperatures, moisture issues, and reduced crop yields. Aging heating, ventilation and insulation systems can also increase energy costs. Renovations can address these issues through better ventilation, improved heating, modern environmental controls and improved glazing. These changes can improve crop consistency while reducing operating expenses.
Case study: a real greenhouse renovation project
A 30-year-old greenhouse in Germany had problems with damaged glass panes and high wind exposure. Instead of rebuilding, a retrofit solution replaced the glazing with ETFE film using a custom track system. This improved light transmission, durability and plant performance, extending the lifespan of the structure. The staggered installation allowed production to continue with minimal disruption, meaning that targeted upgrades could provide significant benefits without a complete rebuild.
© Ceres Greenhouse Solutions
Signs it may be time to rebuild
Reconstruction becomes more appropriate when structural deterioration is severe or design limitations prevent effective improvements. Older greenhouses may have low roof heights, poor airflow, or limited capacity for modern systems, limiting climate control. Changes in crop type can also create the need for new construction, especially when moving to crops with different environmental requirements. In such cases, reconstruction can offer better long-term efficiency and flexibility.
Cost considerations
Upgrades typically involve lower upfront costs and shorter timeframes, often allowing for phased upgrades with minimal disruption. However, it may be limited by design limitations. Retrofitting requires a higher initial investment and longer construction time, but offers full design flexibility, improved energy efficiency and better scalability. Evaluating the return on investment requires consideration of both immediate costs and long-term operating profits.
When the hybrid approach works best
Many operations benefit from a combination of remodeling and reconstruction strategies. Renovating existing structures by adding new greenhouse spaces allows growers to gradually modernize. This approach can optimize capital expenditure, maintain production continuity and support expansion without completely replacing existing infrastructure.
© Ceres Greenhouse Solutions
Questions growers should ask before deciding
Key considerations include the condition of the current structure, the ability to support modern systems, the impact of energy costs and whether environmental conditions limit crop yield. Growers must also assess changes in crop requirements, future expansion plans and expected return on investment. These factors help determine if improvements are sufficient or if new construction is warranted.
Every greenhouse is different
There is no single solution for all operations. Each decision must be based on a careful assessment of the structural situation, production needs and long-term goals. A strategic approach ensures that investments—in retrofitting, rebuilding, or both—result in lasting improvements.
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Ceres Greenhouse Solutions
(email protected)
www.ceresgs.com
Cannabis News
Federal CBD Health Insurance Plan Will Reportedly Allow THC Amount Far Exceeding Hemp Limit Signed By Trump
Published
21 hours agoon
March 19, 2026By
admin
The Centers for Medicare and Medicaid Services (CMS) will soon launch a pilot program Cover the costs of CBD products under certain federal health insurance plans for eligible patients. But the newly announced details of the effort indicate the policy could conflict with a separate law redefining hemp in a way that severely limits the amount of THC allowed.
CMS Administrator Mehmet Oz previously described the CBD coverage plan he is implementing in response to an executive order signed by President Donald Trump in December, which also directs the finalization of a federal rule to reorganize marijuana, saying the plan’s CBD components could be rolled out in April.
But as the agency prepares to offer cannabidiol coverage as part of the pilot program, it has set an initial limit of 3 milligrams of total THC (including delta-8, delta-9 and delta-10 THC, for example) per serving, first as Cannabis Wire. notify—that’s more than seven times the THC limit for hemp-derived cannabinoid products, as defined in the spending bill Trump signed last year.
The cannabis section of that agriculture-based spending bill limits total THC content to 0.4 milligrams per container. And that law, which takes effect in November, will effectively wipe out the market for edible cannabinoids, industry insiders say.
A CMS spokesperson told Cannabis Wire that the agency will “adjust its definition as required by law,” without clarifying how it arrived at the 3-milligram THC limit in the first place.
Bipartisan lawmakers and hemp industry advocates have it He pushed to delay the implementation of new hemp THC restrictions Trump signed it, but these efforts have not gained traction. An amendment on the matter was not accepted in the last House Committee’s markup of a new Farm Bill.
Marijuana Moment reached out to CMS to ask more about the THC policy dispute, but a representative was not immediately available.
The planned pilot program “specifically excludes respirable products,” the spokeswoman also said. And available “orally administered” CBD products would be subject to “state and local laws,” though that raises other questions given the complex patchwork of state-level hemp and cannabinoid policies.
In any case, the newly announced details about the yet-to-be-released rules for the pilot program come weeks after an executive at a hemp company working with CMS said the agency already has them. ended federal health insurance plans for cannabidiol.
“This pilot will help (the Food and Drug Administration, or FDA) move from uncertainty to a practical framework with clear dosing, risk reduction and clear manufacturing label expectations that end up rewarding responsible companies and ultimately protecting and serving the consumer,” said Jared Stanley, founder of cannabis company Charlotte’s Web.
“In terms of the population, it’s important to note in the memo that this is starting in a pilot, but it’s expected to expand beyond the pilot,” he said. “So that’s multiple signs that we’re hoping to see. And we’re very excited. It has amazing potential.”
Relatedly, a CMS spokesperson told Cannabis Wire that while he could not provide exact numbers on the number of patients who will be participating in the pilot program, those details will be released as they become available, and the agency will generally provide updates on the rollout “in the coming weeks.”
When asked about the state of CBD regulation last month, CMS directed Marijuana Moment to a website that describes the integration of hemp into a Beneficiary Engagement Incentive (BEI) program under the agency’s long-term ACO Enhanced Design (LEAD) Model.
“Substance Access BEI allows model participants to consult with their patients about the use of eligible hemp products,” the CMS page states. “Implementation of this BEI and any related distribution would be funded entirely at the participant’s expense; CMS would not cover the cost of these products. Additionally, CMS would have strict program integrity safeguards to ensure that these incentives do not result in program or patient abuse.”
“Substance access is only available to participants in states where BOTH eligible hemp products are considered legal,” it says.
While the broader rules for the CBD Medicare pilot program have not yet been released, the CMS website briefly outlines how it navigates hemp-related issues within the regulatory framework. LEADhas Accountability Accountable Organization (ACO) and Improving Oncology Modeling (EOM).
Oz, the CMS administrator, explained in December that the policy change “will make millions of Americans on Medicare eligible to receive CBD in April of next year, and for free, if their doctors recommend it.”
He added that the Medicare Advantage insurers contacted by CMS “also approve the use of CBD for the 34 million Americans they cover.”
One outstanding question is about coverage eligibility. As the administrator described in December, it would affect those 65 and older who are eligible for Medicare, but the exact conditions were not specified. There were repeated mentions of chronic pain, particularly in relation to cancer, but the CBD eligibility criteria may include additional conditions.
At the signing ceremony, Oz paid tribute to Howard Kessler, founder of The Commonwealth Project, who joined him. Trump shared a video about the benefits of cannabidiol for the elderly Truth Social last year and apparently pressured the president to reform to expand access to cannabis.
While CMS issued a previous final rule this past April specifically stipulating that marijuana, as well as CBD derived from federal law hemp, are ineligible For coverage of the Medicare Advantage program and other services, the agency is revising that policy.
CMS already announced some changes as part of a rulemaking process filed late last year, It affects “marketing and communications, drug coverage, enrollment processes, special needs plans and other programming areas.” for the insurance programs it oversees. One of these changes concerned the coverage of cannabidiol.
The proposed rule would change the regulations, which currently say that “cannabis products” cannot be covered. The policy would “prevent coverage of cannabis products that are illegal under applicable state or federal law, including the Food, Drug, and Cosmetic Act.” Because hemp and its derivatives like CBD are federally legal, the change suggests that patients in states where these products are legal can make valid insurance claims to pay for alternative treatment options, as long as the product is federally legal.
Meanwhile, following the White House’s announcement in December, Oz spoke to NewsNation about the policy change, responding to a question about the Trump administration’s aggressive efforts to stem the flow of other illegal drugs, particularly fentanyl, as the broad decision to re-regulate marijuana.
“We think they go hand in hand,” he said. “This is really research, specifically CBD, hemp-derived endocannabinoids (sic) – that Americans deserve to use them,” he said. “It’s hard to do some of that work, especially with medical marijuana. And this is not about legalizing marijuana.”
“There is no legalization language at all,” he added. “It’s a reprogramming of this product class to make it easier to research.”
The idea that marijuana, as currently defined as a Schedule I drug, has no medical value is “significantly wrong for marijuana,” he said, noting that the Food and Drug Administration (FDA) has approved some cannabis-based drugs for conditions like epilepsy that “work quite well.”
“It’s just a wrong place to put that belief that Schedule I should be,” he said. “Schedule III seemed to make sense to the president. He argued that it allows us to do research more easily.”
“We’re finding a way to make some of these products available to Medicare beneficiaries. And so within Medicare, we have the ability, for the first time, and today we’re making good on this promise to the president, to allow doctors to recommend hemp-derived CBD for, for example, cancer patients who are in a lot of pain.”
The administrator said surveys show that most seniors who take CBD for pain management find it beneficial, and the White House wants to “make it easier for patients to access it” and allow them to access the cannabinoid “at no charge” through the federal health insurance program.
Meanwhile, Oz took a different tone when he warned that last month “there will be consequences” as more Americans choose marijuana over alcohol– Including problems caused by “high dose hemp and CBD”.
In the background, the US Department of Health and Human Services (HHS) and the FDA has recently presented a proposed regulation on CBD enforcement and compliance With the White House Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA). There has been speculation that the rule may be related to the CMS pilot program, but this has not been confirmed. And the proposal may be tied to Congress’s mandate for the FDA to produce a list of known cannabinoids ahead of the federal redefinition of hemp.
user photo Nanny Kimzy.
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When we decided to start our own hydroponic farm, we were always open to the possibility of growing cannabis down the road
Published
2 days agoon
March 18, 2026By
admin
Farm Girl Greens launched in Auburn, New York in late 2019 as a vertical hydroponic leafy greens operation supplying restaurants and farmers markets. The business remained profitable due to changing sales channels, fluctuating grant funding and rising energy costs, but the financial model was becoming increasingly difficult to predict.
When New York legalized adult cannabis and implemented a micro-business licensing structure, the regulatory landscape changed. The subsequent pivot was not sudden, according to co-owner Abby Lepak, but rather the activation of a long-considered opportunity. “When we decided to start our hydroponic farm, we were always open to growing cannabis,” he explains. “At the time, cannabis wasn’t legal in New York state, so our initial business plan was focused on leafy greens.”
© Green farm girls
Farm Girl Greens grow room showing off ZipGrow mobile tower trellis under LED lighting
Market volatility and margin pressure
The farm planted the first seeds in November 2019. By March 2020, the restaurant and farmers market channels had either closed or switched to takeout. “Running a business in the early 2020s was a challenge for any small business owner,” says Lepak. “We were successful in the beginning because of the grocery store supply chain and consumers wanting to buy directly from farmers.”
Farm Girl Greens focused on weekly home deliveries through a distributor as well as its own logistics. As restaurants reopened, sales shifted to food service accounts, reducing margins compared to direct-to-consumer channels. “It was profitable but not so predictable,” says Lepa about the green phase.
An additional outlet was operated by a non-profit nonprofit that supplied food pantries at retail prices by paying subsidies rather than consumers. “The food was free to the consumer, but the funding was unpredictable and then dwindled.”
Utility costs added further pressure. Rising energy bills prompted the farm to build a grant-funded solar installation. The system remains in effect today. “New York state is seeing energy costs double from one month to the next right now,” Lepak says. “Not just for companies.” Profitable but subject to fluctuating demand, unstable funding streams and rising operating costs, the green model became more difficult to plan.
© Green farm girls
A microenterprise license changes the model
Legalization introduced another option. Farm Girl Greens obtained a Micro Business License from the Office of Cannabis Management, New York’s governing body for adult cannabis. “The emerging market of adult-use cannabis cultivation has a bright future,” says Lepak. “The Bureau of Cannabis Management has taken steps to prevent large growers from flooding the market. Because we are a small grower and a predominantly female-owned business, we have been able to take advantage of training and fees at reduced prices and sometimes at no cost.”
The license allows cultivation, processing, distribution and retailing under one structure. For now, the farm is cultivating and shaking the flowers, using a third-party processor to extract them, and selling wholesale to pharmacies. As an indoor micro-business, the production covers 3,500 square feet of space and processes 1,700 pounds of cannabis per year.
Different crop, different system
Change required new infrastructure. The ZipGrow tower system used for leafy greens has been replaced with a high-pressure aeroponic recirculation system designed by Current Culture, along with a vertical rack from Pipp Horticulture.
“The leafy greens in our ZipGrow system didn’t require as much space and had a shorter seed-to-harvest cycle,” says Lepak. At peak production, the farm harvested the equivalent of 1,500 heads of lettuce per week while planting another 1,500 seeds.
Indoor cannabis works on a longer cycle, usually between 90 and 100 days. With a flower room currently in operation, the farm expects five harvests a year at full production. A second flower room is planned. Once built, a staggered planting schedule would allow ten harvests per year.
© Green farm girls
Higher margins, higher limits
Per square foot, cannabis offers stronger margins than leafy greens, Lepak says. But regulatory costs and add-ons dampen this advantage. “We expect margins to increase as cannabis legalization and additional fees decrease. These fees are very close to being cost prohibitive.”
Compliance-related packaging requirements and limited access to banking continue to weigh on profitability. Job applications have also changed. Leafy greens required a steady weekly workforce to manage the cycles and distribution of perishable crops. Growing cannabis involves less daily handling, but requires more concentrated work during the harvest and processing periods.
© Green farm girls
A member of the Farm Girl Greens team transplants seedlings (left) and inside a Matrix Media ZipGrow tower channel (right)
Looking back
Despite the transition, Lepa says he would still start with green leaves. “I enjoyed learning the process of indoor growing and selling at farmers markets,” she says. “Being a grower that delivers product directly to a consumer was a joy for me.”
Farm Girl Greens is selling its ZipGrow tower inventory as it consolidates its cannabis growing operations. “We have a total of 630 towers and associated lights and are willing to sell 450 towers, 180 towers or all 630 together,” says Lepak. “The eight-foot towers are mounted in 21 racks of 30 units. Complete system purchase of all 630 towers includes additional climate control equipment at no additional cost: CO2 generator and vertical V-Flow fans.”
Those interested in buying towers can go directly to Lepak (email protected).
A video tour of the Farm Girl Greens farm setup
© Green farm girls
Complete design of the ZipGrow tower system inside the farm
For more information:
Green Farm Girls
Abby Lepak, co-owner
(email protected)
www.instagram.com/farmgirlgreens
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