The Michigan Cannabis Industry Association on Tuesday appealed a lower court ruling that upheld the imposition of a new 24% wholesale tax on marijuana sales.

The controversial tax is set to take effect Jan. 1, but the marijuana association has asked the Michigan Court of Appeals to take up the case immediately, preferably before New Year's Day.

"The 24% wholesale tax violates the will of the voters who approved the 2018 citizen ballot initiative on cannabis, and we will not back down from fighting for the will of the people in court," said Rose Tantraphol, a spokeswoman for the association.

The wholesale tax, which is expected to bring in about $420 million annually, is a key element of a plan meant to increase revenue for roads ― one that was agreed to in October by the Republican-led House, the Democratic-led Senate and Democratic Michigan Gov. Gretchen Whitmer.

The Michigan Cannabis Industry Association has argued the new tax should have required supermajority support from lawmakers during votes in October because the policy amends a ballot proposal that voters approved in 2018 to legalize recreational marijuana and set a 10% excise tax on retail sales.

Instead of a supermajority or support from three-quarters of lawmakers, the bills passed with the support of only 19 of 37 members in the Senate and 78 of 110 lawmakers in the House.

Michigan Court of Claims Judge Sima Patel, a Whitmer appointee, earlier this month rejected an effort by marijuana groups to immediately block implementation of the tax. Patel noted that the ballot proposal recognized "other taxes," and so the new wholesale tax appeared to be consistent with the ballot language.

"Plaintiffs have not met the stiff burden of demonstrating that they will likely succeed on the merits," Patel wrote of not granting a preliminary injunction against the new law.

But Patel said there "remain questions of fact" regarding whether the excise tax interferes with the intent of the 2018 ballot proposal, which put in place a 10% excise tax to keep retail prices reasonable and the illicit market in check.

The marijuana association is now urging the Court of Appeals to act quickly on its appeal with the Jan. 1 effective date a little more than a week away.

"All issues presented in this case are ripe for this court's resolution now," the appellate filing said.

"Waiting until final judgment to resolve a non-determinative 'fact issue' would cause substantial harm to plaintiffs — who will be forced to bear and collect an unconstitutional tax beginning January 1, 2026."

The stakes are high, Tantraphol said in a statement Tuesday, and the risk to the marijuana market, and the state's economy by extension, are real. Already a few marijuana businesses have begun to lay off employees, she said, and customers could begin turning in greater numbers to the black market.

"The last thing the state should be doing is pushing Michiganders who are already feeling stretched financially into the illicit market,” she said.

Recreational marijuana retail sales in Michigan last year amounted to roughly $3.2 billion, according to data reported by the Cannabis Regulatory Agency.

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(Staff writer Craig Mauger contributed.)

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