The 24% wholesale tax on cannabis, passed last year by Michigan lawmakers, generated far less revenue in its first quarter than anticipated. The Detroit News reports.

Lawmakers drafted legislation to fund road construction and repairs in the state, and the nonpartisan House Fiscal Agency estimated the 24% wholesale tax would generate about $420 million a year. The state received less than $34 million in the first few months of the new tax, less than a third of quarterly expectations.

Michigan Cannabis Industry Association (MICIA) argued last year that the wholesale tax was unconstitutionally messing with the cannabis framework approved by voters, but the courts refused to block the tax from taking effect on January 1.

“Our elected leaders made the cannabis industry a sacrificial lamb to have the illusion of a road funding fix,” MICIA executive director Robin Schneider said in the report.

“In reality, the only thing they’ve accomplished is the destruction of a strong industry that served as an economic driver for this state. The result is closing businesses, losing jobs, and stripping local governments of tax revenue.” – Schneider, via The Detroit News

The trade group presented a the second lawsuit challenging the wholesale tax on cannabis in March.

Minnesota Gov. Tim Walz (D) last week signed the bill into law reorganization of legislation State cannabis supply chains for medical and adult use.

The law eliminates the state’s current combined medical and adult-use license, sets a new plant cover cap of 38,000 square feet for indoor cultivation — up from a maximum of 90,000 square feet for combined licenses — with 60,000 square feet reserved for medical cannabis products. The bill also creates a new cannabis microbusiness license that will be available starting in 2027.

In addition, the legislation allows companies to hold business licenses for hemp and cannabis. In one STATEMENTState Rep. Nolan West (R) called the previous regulations “absolutely brutal” to businesses and that the bill would fix the “deal of problems” in the state’s cannabis market and open it up so the state “has a thriving market that’s not dominated by just a few players.”

Additionally, the legislation requires the Office of Cannabis Management to conduct a feasibility study to explore a psilocybin therapeutic program. The report on that study is due by January 15, 2027.

California’s cannabis industry generated nearly $248 million in tax revenue during the first quarter of 2026, according to the California Department of Taxation and Fee Administration.

The total includes $143.6 million in cannabis excise and $104.3 million in cannabis sales taxes. The figures do not account for unpaid returns or those still being processed, officials at a press release.

Quarterly tax revenue represents a drop from the previous quarter, which officials revised to $257.6 million (from $255.1 million) due to amended and delayed returns.

Additionally, based on the latest figures, the market’s total tax revenue since California began sales of adult-use cannabis now exceeds $8.1 billion, including $4.34 billion in excise taxes, more than $3.28 billion in sales taxes and $500.6 million in a now-suspended cultivation tax, which lawmakers is eliminated in the year 2022.

Cannabis excise duty is applied at the retail level based on gross receipts. State sales tax is added after the excise tax is applied.

Meanwhile, in March, the Los Angeles City Council asked city officials draft language for an “amnesty” program for the city’s cannabis businesses, which collectively owed hundreds of millions in back taxes and fees.