ALPENA – Michigan House Bill 4951 (HB 4951) took effect on Thursday, which installs a 24% wholesale tax on top of the current 10% excise tax and 6% sales tax. The bill is part of an effort to raise money to fix and repair roads, as well as other infrastructure.

Meds Cafe, a marijuana dispensary with locations in Alpena and Rogers City, has several locations throughout Michigan. Josh Covert, chief executive director of Meds Cafe, said that the increase may force the dispensary to reevaluate its pricing.

“The wholesale price in some cases will increase up to 24% causing us to reevaluate our retail prices and margins,” Covert said. “In some cases, customers may see slight increases, for example, products may be priced closer the way they were in 2023 or 2024.”

Covert said he feels like the new tax increase is about more than cannabis.

“I feel the additional tax isn’t just about cannabis, it is an attack on direct democracy,” Covert said.

Kevin Currier, owner of Neighborhood Provisions, also said that the tax isn’t necessarily about cannabis.

“It is a shame and a betrayal how the government is treating its vulnerable citizens, and industry,” Currier said.

The News first reported on HB 4951 in October, and at that time Currier described some of his concerns. Among them was the impact on local consumers.

“This is a burden on the people,” Currier said. “The customer feels it with their wallet.”

Neighborhood Provisions Purchasing Manager Trevor Collins also gave an example of how the increase is ultimately felt by customers.

“Our costs of goods will go up, and that is when the customer sees it,” Collins said. “Previously if something cost us a dollar, it was a dollar. Now it will be $1.24. Therefore, causing us to eventually raise prices.”

Neighborhood Provisions Inventory Manager Travis Parker said that his shop has refrained from any price increases thus far and that the shop hopes to keep it that way as long as possible.

“We have not changed any prices yet,” Parker said. “Inevitably we will have to. We are trying to hold out and keep prices as is, as long as we possibly can.”

Back in October, Currier told The News that he was concerned about consumers returning to the black market for their marijuana needs.

“Access is being taken away,” Currier said. “People will get it somewhere else.”

Parker said he also believes some customers will go elsewhere for their cannabis needs in response to price increases.

“Our bigger spending customers will see the price impact the most. I would not be surprised if those people start going elsewhere,” Parker said. “Customers have been reaching out with their concerns over prices.”

The effects of the tax increase have already resulted in the closure of marijuana related businesses in Michigan, according to a FOX 2 Detroit article from Dec. 23. Among the closures is a cultivation facility in Webberville, resulting in 67 people losing their jobs.

A cultivation facility is a licensed commercial operation specifically designed for the large-scale planting, growing, harvesting, and processing of cannabis.

Parker explained how these closures will impact products available to consumers.

“The facilities that produce pre-rolls, and various products, including edibles, will have to close due to the increase in costs to operate,” Parker said. “Making it harder to find those products in a dispensary.”

Although the total impact on local dispensaries from the tax increase is unknown, those at Neighborhood Provisions are staying optimistic.

“I believe we are here to stay, and we are going to hold out as long as possible before we raise our prices. We will adapt and adjust accordingly,” Collins said.

Josh Jambor can be reached at jjambor@thealpenanews.com.