MI Monthly Puff: Michigan Withholds Cannabis Tax Memo as DEA Sets June Hearing

Michigan Cannabis Retail Market Update – May 2026

Michigan’s cannabis market enters May 2026 under a cloud of regulatory tension. The Whitmer administration is refusing to release an internal Cannabis Regulatory Agency memo on the Michigan cannabis wholesale tax, even as that tax is now funding road projects. Meanwhile, the DEA has locked in a June 29 hearing on recreational marijuana rescheduling, and the CRA is stacking formal complaints against multiple licensees.

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Top Headlines This Month

• 🏛️ Whitmer administration refuses to release cannabis tax memo
• ⚖️ DEA sets June 29 hearing on marijuana rescheduling
• ⚠️ Doja owner fined $15,000 for expired-license product transfer
• ⚠️ CRA files second complaint against testing lab Prism Triangle over data-manipulation allegations
• 🤝 Gelato Canna and Fat & Weird launch co-branded THC cookies

🏛️ MICHIGAN: WHITMER ADMINISTRATION REFUSES TO RELEASE INTERNAL CANNABIS TAX ANALYSIS MEMO

Gov. Gretchen Whitmer’s administration has refused to fully release an internal analysis examining how additional taxes on marijuana would affect the Michigan cannabis industry and whether they would push more purchases to the illegal market. The Cannabis Regulatory Agency provided the governor’s office a four-page memo on those potential repercussions in November 2023 – about 14 months before Whitmer publicly proposed a wholesale tax on marijuana. The administration is currently using that new marijuana tax to fund road projects.

The refusal to release the memo raises questions about what the CRA’s own analysis found, particularly given that the Michigan cannabis wholesale tax is now in effect. The gap between when the administration received the analysis and when it proposed the tax publicly will likely draw continued scrutiny from those watching how Michigan’s cannabis market responds to the added tax burden.

Source: Detroit News

⚖️ FEDERAL: DEA SETS JUNE 29 HEARING ON MARIJUANA RESCHEDULING AS MEDICAL CANNABIS CLEARS SCHEDULE III

The Drug Enforcement Administration has formally scheduled a June 29 hearing, running through mid-July, to determine whether marijuana as a whole will be reclassified from Schedule I to Schedule III under federal law. Separately, FDA-approved and state-legal medical marijuana has already been moved to Schedule III, lifting the IRS Section 280E restriction that previously barred cannabis businesses from deducting ordinary expenses such as payroll, rent, and marketing – a provision that had pushed effective tax rates as high as 60 to 80 percent for many dispensaries. The DEA is now accepting applications from medical marijuana businesses seeking federal registration under the new Schedule III framework. In Michigan, though, the immediate financial relief is narrow: the Michigan Cannabis Regulatory Agency reported medical marijuana sales in March totaled less than $500,000, compared with roughly $255 million in adult-use sales. A final rule on recreational rescheduling is expected no sooner than late 2026, and more likely November or December 2026, with legal challenges potentially pushing the timeline into 2027.

For Michigan’s cannabis market, which runs overwhelmingly on adult-use revenue, the 280E relief landing on the medical side first means most dispensaries are still waiting. Full banking normalization also remains out of reach without congressional action – passage of something like the SAFE Banking Act. The June 29 hearing is the next concrete milestone, but a final outcome this year is possible, not guaranteed.

Source: MiTechNews

⚠️ PORTAGE: DOJA DISPENSARY OWNER FINED $15,000 AND SUSPENDED FOR PRODUCT TRANSFER FROM EXPIRED-LICENSE STORE

LE Battle Creek LLC, which owns the Doja dispensaries in Portage and Watervliet, agreed to pay a $15,000 fine and accept a 14 business day license suspension after the Michigan Cannabis Regulatory Agency filed a formal complaint in February 2026. The violation stemmed from a December incident involving the company’s now-closed sister store, Lake Effect, on Westnedge Avenue. Lake Effect’s license expired December 13, and the CRA notified the retailer two days later that no product transfers were allowed. Despite that notice, Doja Portage accepted a product shipment from Lake Effect on December 16, and some of those products were sold at the Doja store that same day. Michigan law bars cannabis retailers with expired or inactive licenses from transferring products to another store. The 14 business day suspension began March 30 (covering roughly three calendar weeks), and both Doja locations – Portage and Watervliet – are listed as temporarily closed.

The case illustrates how quickly a license status issue at one location can create liability across a multi-store operation. The CRA notified the company of the restriction before the transfer occurred, making it difficult to argue the violation was accidental. For any retailer managing sister stores, tracking license renewal dates at every location is directly tied to what product movements are legally permitted.

Source: Michigan.gov

⚠️ WALLED LAKE: CRA FILES SECOND COMPLAINT AGAINST TESTING LAB PRISM TRIANGLE OVER ALLEGED TEST-DATA MANIPULATION

The Michigan Cannabis Regulatory Agency filed a second formal complaint on April 10, 2026, against Prism Triangle LLC, a state-licensed cannabis safety compliance facility (License No. AU-SC-000124) at 850 Ladd Rd., Bldg. B, Walled Lake. The action follows a first formal complaint announced by the CRA on January 30, 2026. Both complaints allege “peak shaving” – the manual manipulation of quality-control readings on lab instruments so that samples appear to pass tests they would otherwise fail. The January complaint charged Prism with eight violations covering alleged peak shaving on tests for the banned pesticide bifenazate (a miticide) and the use of an unapproved plating method for aspergillus (mold) testing. The April complaint adds four more violations involving inflated delta-9 THC and THCA potency results, discovered after the CRA had Prism and another lab cross-test the same batch samples and found significant discrepancies. According to the January complaint, a Prism lab technician confirmed to CRA investigators that they manually integrated peak data used to verify bifenazate calibration. Prism, which claims to be the largest testing lab in the state, has not requested a hearing on either complaint as of early May. Statements in formal complaints are allegations.

For Michigan retailers, the implications go beyond another stacked enforcement action. If the allegations hold up, products sold under Prism’s certificates of analysis may have carried inflated THC labels or undetected pesticide contamination – issues that touch product liability, recalls, and consumer trust simultaneously. The CRA pursued a multi-year case against Viridis Labs, then the state’s largest testing lab, on similar allegations of inflated THC results and concealed pesticide detections; that case concluded with Viridis effectively shut down. Two formal complaints against Prism in under three months put the lab in a comparable trajectory. Retailers and brands relying on Prism for compliance testing should be evaluating their exposure now rather than after a potential CRA action escalates.

Sources: Michigan.gov | CRB Monitor

🤝 MICHIGAN: GELATO CANNA AND FAT & WEIRD COOKIES LAUNCH CO-BRANDED THC EDIBLES AT LICENSED DISPENSARIES

Gelato Canna, based in Michigan and operating in multiple states including California and Arizona, announced an exclusive partnership on April 16, 2026, with Fat & Weird Cookies, a nationally recognized cookie brand, to produce co-branded THC-infused edibles. Under the deal, Fat & Weird will supply its signature cookies to Gelato Canna, where they are enrobed, infused with THC, and packaged under labels such as “Fat & Weird by Gelato” and “Powered by Gelato.” The initial launch covers five signature flavors. Each cookie weighs approximately 5 ounces before infusion – 6.9 ounces after enrobing – and contains 200mg of THC, with a retail price of approximately $15. The products are available exclusively at licensed cannabis stores throughout Michigan.

The deal represents a mainstream consumer brand entering the licensed cannabis retail channel through a co-branding arrangement rather than a direct cannabis license. For Michigan dispensaries, it adds a recognizable non-cannabis brand name to the edibles shelf at an accessible price point, which has the potential to draw in consumers already familiar with the cookie brand from outside cannabis retail.

Source: Morningstar

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The Bottom Line

May 2026 underscores how much pressure Michigan’s cannabis market is absorbing at once, from the contested Michigan cannabis wholesale tax to a DEA rescheduling hearing that could reshape federal tax treatment. At the retail level, the CRA is moving aggressively against licensees, including a major testing lab whose alleged data manipulation could ripple back through every brand and retailer that relied on its results. Meanwhile, brand partnerships like Gelato Canna and Fat & Weird show the edibles category still pulling in mainstream consumer names.