Michigan Treasury Sets April 20 Deadline for First Wholesale Marijuana Tax Payments With Penalty Waiver Option

Michigan Treasury Sets April 20 Deadline for First Wholesale Marijuana Tax Payments With Penalty Waiver Option

DETROIT — The Michigan Department of Treasury has issued detailed guidance on the state's new 24% Wholesale Marijuana Tax, announcing that the first quarterly tax payments are due on April 20, 2026. Treasury officials clarified that businesses will receive a grace period with penalty and interest waivers if they submit at least 75% of their taxes by the deadline and pay the full amount by January 20, 2027.

The guidance, issued as Revenue Administrative Bulletin 2026-3 on March 17, 2026, provides the most comprehensive explanation to date of how the wholesale tax works, including 25 real-world scenarios illustrating Treasury's interpretation of the Comprehensive Road Funding Tax Act, or CRFTA, which established the new excise tax.

Payment Schedule and Grace Period

In initial guidance released earlier, Treasury had stated that the first wholesale marijuana tax payments would not be due until January of 2027. The department has now accelerated the deadline to April 20, 2026, which is just over four weeks from the Jan. 1, 2026 effective date of the tax.

However, Treasury acknowledged the implementation challenges and created a relief mechanism for businesses. Under the new framework, the state will waive all penalties and interest if a cannabis business:

• Submits at least 75% of the tax due by April 20, 2026
• Pays the remaining balance in full by January 20, 2027

This approach gives Michigan's cannabis industry time to adjust to the new compliance requirements while ensuring the state begins collecting the revenue the Legislature intended.

What Transactions Are Taxed

The wholesale tax applies to the first sale or other transfer of marihuana from a marijuana establishment to a marijuana retail licensee under MCL 205.905(a). The tax is imposed on the entity acting as the wholesaler in each taxable transaction — essentially the marijuana establishment that makes the first sale or transfer to a retailer.

Treasury clarified that the wholesale tax is not imposed on sales from a marijuana grower to a marijuana processor, as these transactions do not represent the first sale or transfer to an entity licensed by the Cannabis Regulatory Authority to make retail sales of adult-use marihuana.

Transfers from medical provisioning centers to adult use retailers are also subject to the tax, as are microbusinesses when marijuana is cultivated and processed for retail sale.

When Transactions Occur

A taxable transaction occurs when ownership of the product transfers — generally upon delivery to the retailer, though not always. For example, ownership could transfer at the time product is picked up by secure transport.

Treasury cautioned that taxpayers should not look to Metrc to determine when transfer of ownership takes place. The department emphasized that the wholesale tax is based on actual transfer of ownership, not on Metrc reporting schedules or transaction records.

Calculating Taxable Value

For sales between unaffiliated parties, CRFTA bases the tax on the actual price paid, with two important exceptions or adjustments.

First, the actual price includes any tax, fee, or other charge reflected on the invoice, bill of sale, purchase order, or other document evidencing the sale or transfer of the marihuana. Treasury clarified that the excise tax itself is not included in this calculation.

Second, the wholesaler must add back any rebate, trade allowance, exclusivity agreement, or other discount or reduction.

With respect to taxes, fees, or other charges, Treasury established a test for excluding charges or fees for bona fide services that are unrelated to the acquisition of the marihuana product. Examples could include marketing services. To be excluded, the charges must:

• Be commercially reasonable in amount relative to the service provided and to the price of the marihuana sold
• Be separately stated on the invoice or bill of sale
• Be supported by contemporaneous documentation, such as a contract or service agreement between the parties
• Not be used as a means of falsely reducing the price of the marihuana sold in order to avoid the imposition of the tax on the entire amount

If Treasury challenges the exclusion of a charge, the burden is on the wholesaler to prove that the test is met.

The RAB is clear that invoiced shipping charges are taxable, although it says nothing about how they're treated if the retailer is billed by a secure transporter and is responsible for directly paying shipping costs.

The RAB also creates a test to define what constitutes a discount or price reduction that must be added back to the price paid. Under Treasury's test, this means a discount that:

• Is published or advertised by the wholesaler or on a third-party platform
• Is available to any retailer or class of retailers
• Is typically stated on the invoice or other document showing evidence of the sale

Importantly, the RAB does make clear that a negotiated price, not based on a set discount, is the actual price paid for purposes of the tax.

Average Wholesale Price

The RAB also establishes how Treasury determines the average wholesale price for products sold to retailers. While the full guidance contains detailed calculations, the core principle is that Treasury will use actual transaction data from the marketplace to establish average wholesale prices for various product categories.

Implementation Challenges

The guidance notes several practical implementation challenges that Treasury is addressing. The department cannot yet accept credit card payments for the wholesale tax, and the tax form will not be ready until November 2026.

Treasury officials have indicated they will continue to issue guidance and clarification as businesses begin filing their first quarterly returns. The department has held multiple consultation meetings with different stakeholder groups and has solicited comments from the industry before issuing RAB 2026-3.

Industry Reaction

The cannabis industry has reacted cautiously to the Treasury's guidance. While the detailed scenarios and clear rules are welcomed by many businesses, some industry representatives have expressed concern about the compressed timeline for compliance.

Law firms representing Michigan cannabis businesses have noted that RAB 2026-3 contains 25 real-world scenarios detailing how Treasury believes CRFTA's requirements should apply. Although much of the guidance's substance is an extension of the first draft, there are several notable points that will require businesses to adjust their accounting and compliance procedures.

What Comes Next

Treasury will continue to monitor the implementation of the wholesale tax and will issue additional guidance as needed. The department has committed to working with cannabis businesses to ensure a smooth transition to the new compliance requirements.

For now, the April 20, 2026 deadline remains in effect, with the penalty and interest waiver option available to businesses that meet the 75% submission threshold. The full tax form will be released in November, and credit card payment options remain unavailable until Treasury completes its systems implementation.

Cannabis businesses operating in Michigan should review the full Revenue Administrative Bulletin 2026-3 and begin preparing their quarterly tax filings. The state expects the wholesale tax to generate significant revenue for Michigan schools and other programs funded through CRFTA.