Michigan Court Says: Medical Pot Shops Can't Claim Tax Breaks

Recent Court Decision Creates Disparity

Michigan's medical marijuana dispensaries are in a tough spot. Unlike their recreational counterparts, they can't claim tax deductions. This is due to a recent court decision that has left many businesses feeling the pinch.

The Court's Ruling

The Michigan Court of Appeals ruled against Cannarbor Inc., a medical marijuana dispensary that attempted to deduct business expenses from its state taxes. The court sided with the state's decision to deny these deductions, creating a significant disadvantage for medical marijuana businesses.

The Argument

Cannarbor Inc. argued that the disparity in tax treatment between medical and recreational marijuana businesses is unconstitutional. However, the court disagreed. It stated that the voter-approved law legalizing recreational marijuana specifically included tax breaks, which medical marijuana was not part of.

The Impact

This ruling affects all medical marijuana businesses in Michigan. They are now unable to deduct ordinary business expenses from their state taxes, putting them at a competitive disadvantage compared to recreational pot shops.

The Bottom Line

The court's decision is clear: medical marijuana dispensaries must pay more taxes. Without the ability to claim the same deductions as recreational pot sellers, these businesses face an uphill battle.