The Case of Cannarbor -v- The Michigan Dept of Treasury

Nice Try…

This case centered on the disagreement between Cannarbor, Inc., a medical marijuana provisioning center operating in Michigan, and the Michigan Department of Treasury concerning the obligation to collect sales tax on the retail sale of medical marijuana. Cannarbor contended that its sales should be exempt from sales tax, pointing to a 2011 communication from a Deputy Treasurer which indicated that transactions between registered caregivers and patients were not considered taxable sales. Conversely, the Department of Treasury maintained that the state’s General Sales Tax Act (GSTA), alongside the Medical Marihuana Act (MMMA) and the more recent Medical Marihuana Facilities Licensing Act (MMFLA), clearly established that retail sales by licensed provisioning centers were subject to sales tax, a distinction from the non-taxable services offered by individual primary caregivers.

The Michigan Court of Claims ruled in favor of the Department of Treasury, a decision that was subsequently affirmed upon appeal. The appellate court underscored that the MMFLA, enacted after the issuance of the 2011 letter, drew a distinct line between primary caregivers, who offer non-taxable support to qualifying patients, and licensed provisioning centers, which conduct taxable retail transactions. The court highlighted the Legislature’s deliberate omission of a sales tax exemption for provisioning centers, in contrast to the explicit exemption provided to primary caregivers for the reimbursement of their costs. Furthermore, the court dismissed Cannarbor’s assertion that its activities were equivalent to those of primary caregivers, emphasizing that the legislative framework itself differentiated these entities.

Finally, the court rejected Cannarbor’s arguments regarding detrimental reliance on the 2011 letter and alleged violations of equal protection and the principle of uniform taxation. The court reasoned that the 2011 letter, predating the MMFLA, was not applicable to the operations of licensed provisioning centers established under the new regulatory framework. Moreover, the court concluded that provisioning centers and primary caregivers were not similarly situated for taxation purposes, as the Legislature had a rational basis for establishing different tax treatments for these distinct categories of actors within the medical marijuana system.

Read the COA 368901 CANNARBOR INC V DEPARTMENT OF TREASURY Opinion

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We fight for our clients throughout the State of Michigan and Northern Ohio.

Here are some court contacts we frequently handle cases.

Oakland County

If you are facing any legal charges in Oakland County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information:

Telephone Number: (248) 858-0344
Address: 1200 N Telegraph Rd, Department 404, Pontiac, MI 48341-0404
Website: Oakland County 6th Judicial Circuit Court

Macomb County

If you are facing any legal charges in Macomb County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information:

Telephone Number: (586) 469-5150
Address: 40 N. Main Street, Mt. Clemens, MI 48043
Website: Macomb County 16th Judicial Circuit Court

Wayne County

If you are facing any legal charges in Wayne County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information for the Third Circuit Court (Wayne County):

Telephone Number (Civil/Family): (313) 224-5510
Telephone Number (Criminal): (313) 224-5261 or (313) 224-2503
Address (Civil/Family): 2 Woodward Avenue, Detroit, MI 48226
Address (Criminal): 1441 St. Antoine, Detroit, MI 48226
Website: https://www.3rdcc.org/

Kent County

If you are facing any legal charges in Kent County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information:

Telephone Number: (616) 632-5220
Address: 180 Ottawa Avenue NW, Grand Rapids, MI 49503
Website: Kent County

Traverse County

If you are facing any legal charges in Traverse County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information for the 13th Circuit Court (which includes Traverse County):

Telephone Number: (231) 922-4701
Address: 328 Washington Street, Suite 300, Traverse City, MI 49684
Website: Traverse City 13h Circuit Court

Monroe County

If you are facing any legal charges in Monroe County and need to hire an attorney, call our Office (248) 357-2550. If you need to contact the court, here is the information: