Michigan Cannabis Tax Bill HB4951- Passed

In case you did not know…

In September 2025, the Michigan Legislature passed House Bill 4951, known as the Comprehensive Road Funding Tax Act. This legislation introduces a significant change to the taxation of marijuana in Michigan, with implications for cannabis businesses and consumers alike.

Overview of HB4951

Effective January 1, 2026, HB4951 imposes a new 24% excise tax on wholesale marijuana transfers. This tax applies to:

• Transfers from marijuana establishments to retail licensees.

• Transfers from provisioning centers to retail licensees.

• Marijuana cultivated or processed by retailers for direct sale.

The tax is calculated based on the wholesale price, which includes all fees and charges but excludes discounts or rebates. The Michigan Department of Treasury will administer the tax, including rulemaking, collection, and enforcement.

Revenue Allocation

The revenue generated—estimated at $420 million annually—will be distributed between two newly created funds:

• Comprehensive Road Funding Fund: Supports administration and implementation of the act.

• Neighborhood Road Fund: Finances road construction, maintenance, and preservation across Michigan.

For fiscal year 2025–26, $3 million will be allocated to the Comprehensive Road Funding Fund, with the remainder going to the Neighborhood Road Fund. In subsequent years, the administrative allocation will be reduced to $500,000, adjusted annually for inflation.

Legislative Background

HB4951 was introduced by Rep. Samantha Steckloff (D–Farmington Hills) as part of a broader infrastructure funding package. It complements other bills addressing fuel taxes, corporate income tax, and insurance assessments. The legislation reflects Michigan’s strategic shift toward leveraging cannabis industry revenues to address long-standing infrastructure needs without increasing general taxes.

Frequently Asked Questions (FAQs)

1. What is the purpose of HB4951? HB4951 aims to generate sustainable funding for Michigan’s road infrastructure by imposing a new excise tax on wholesale marijuana transactions.

2. Who is affected by the new 24% marijuana tax? Cannabis businesses—specifically growers, processors, provisioning centers, and retailers—will bear the tax burden. While consumers won’t pay this tax directly, retail prices may increase as businesses adjust.

3. How is the wholesale price determined? For unaffiliated transactions, it’s the actual price paid, including fees. For affiliated entities or self-produced marijuana, the Department of Treasury will publish an average wholesale price quarterly.

4. Where does the tax revenue go? Funds are split between the Comprehensive Road Funding Fund (for administration) and the Neighborhood Road Fund (for road projects statewide).

5. When does HB4951 take effect? The new tax structure begins on January 1, 2026, contingent on the enactment of related bills (HB4183, HB4961, HB4968) addressing fuel, income, and insurance taxes.

For full legislative text and analysis, visit:

• Michigan Legislature HB4951 Bill Page
• House Fiscal Agency Legislative Analysis PDF
• Michigan Regulation and Taxation of Marihuana Act Definitions