A Michigan cannabis company has announced plans to suspend operations at five of its nine dispensaries, tying the decision to the state’s 24% wholesale tax on cannabis products. Higher Love Cannabis Co. indicated that August 9 was the last day of business at its Upper Peninsula retail operations in Crystal Falls, Escanaba, Houghton, Munising, and Ontonagon.
In a press release, Higher Love called the 24% tax “another substantial cost in a market already subject to a 10% retail excise tax and 6% sales tax.”
“While these taxes apply at different stages of the supply chain and do not constitute a single combined tax rate, their collective impact has created an increasingly unsustainable operating environment – particularly for compliant businesses serving smaller and rural communities.” — Higher Love in a press release
The company said its retail businesses in Ironwood, Marquette, Menominee, and Norway would remain open.
“This decision comes amid broader pressure across Michigan’s cannabis industry, where oversupply, price compression and declining revenue have already forced numerous businesses to consolidate, suspend operations facilities and eliminate jobs,” the company said. “The added tax burden has further strained the supply chain and made it increasingly difficult for responsible operators to remain viable.”
A bill proposed in the state in July seeks to repeal the wholesale cannabis tax; however Higher Love did not indicate whether they would restart business at the Upper Peninsula dispensaries were the bill to become law.
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