Ann Arbor, Michigan Cannabis Tax Rate
16% totalAdministering agencies: Michigan Department of Treasury · Updated for 2026
A legal cannabis purchase in Ann Arbor is taxed at a combined effective rate of about 16% — all of it from Michigan's state-level taxes, since Ann Arbor does not add a local cannabis tax. Every major Michigan city tracked here carries the same combined rate, because Michigan does not let cities add their own cannabis tax on top of the state rate. On a typical $100.00 dispensary purchase that works out to roughly $16.00 in tax, or about $116.00 out the door.
Ann Arbor was an early adopter of cannabis reform in Michigan; like every Michigan city, it cannot levy a local cannabis tax on top of the state rate.
How Much Is Cannabis Tax in Ann Arbor?
Use these worked examples to see what Ann Arbor's 16% combined cannabis tax adds to a dispensary purchase. Figures apply the Michigan state excise, 6% state sales tax to the pre-tax price.
| Pre-tax price | Total tax | Ann Arbor city tax | You pay |
|---|---|---|---|
| $50.00 | $8.00 | $0.00 | $58.00 |
| $100.00 | $16.00 | $0.00 | $116.00 |
| $200.00 | $32.00 | $0.00 | $232.00 |
Estimates treat all taxes as applied to the retail price; actual receipts vary by product, potency tax (where applicable), and exact local sales rate. Model a specific basket with the Ann Arbor tax calculator.
Ann Arbor Cannabis Tax Breakdown
| Tax | Rate | Notes |
|---|---|---|
| Michigan Cannabis Excise | 10% | State-imposed retail excise |
| Wholesale / Cultivation Excise | 24% | Imposed upstream; embedded in retail price |
| Michigan State Sales Tax | 6% | Applies to medical and adult-use sales |
| Typical Local Sales Tax | 0% | County / district average |
| Ann Arbor Cannabis Business Tax | 0% | No city cannabis tax levied |
| Combined Effective Rate | 16% | What you actually pay at retail |
Official source: Michigan Department of Treasury ↗ · rates compiled 2026-08-11 · city rates set by local ordinance.
How Medical Cannabis Is Taxed in Ann Arbor
Medical cannabis is not subject to the 10% excise; the 6% state sales tax still applies. In practice that trims roughly $10.00 off every $100.00 spent versus an adult-use purchase in Ann Arbor.
Why Is Cannabis Taxed This Much in Ann Arbor?
Cannabis in Ann Arbor carries layers of tax that ordinary retail goods never see. Michigan adds its 10% cannabis excise, a 24% wholesale/cultivation excise that is baked into shelf prices, on top of ordinary sales tax. Because Ann Arbor does not add a local cannabis tax, shoppers here pay only the Michigan state-level taxes — which keeps Ann Arbor on the lower-cost end of the Michigan market.
10% cannabis excise tax on retail adult-use + 6% state sales tax at the register. A new 24% wholesale marijuana tax (Comprehensive Road Funding Tax Act, signed October 2025) applies to adult-use product transferred to retailers starting January 1, 2026 — paid upstream and built into shelf prices. Michigan does not allow local jurisdictions to add a cannabis-specific tax. Medical cannabis is not subject to the 10% excise.
Ann Arbor vs Other Michigan Cities
Michigan keeps local cannabis taxes uniform, so the combined rate in Ann Arbor matches the other major cities below — the main cost difference between them comes down to base dispensary pricing, not tax.
| City | City Cannabis Tax | Combined Effective Rate |
|---|---|---|
| Detroit | 0% | 16% |
| Grand Rapids | 0% | 16% |
| Lansing | 0% | 16% |
| Ann Arbor (this page) | 0% | 16% |
| Flint | 0% | 16% |
See the full Michigan cannabis tax guide →
Frequently Asked Questions
What is the cannabis tax rate in Ann Arbor, Michigan?
How much tax will I pay on a $100 cannabis purchase in Ann Arbor?
How much is the cannabis business tax in Ann Arbor?
Are medical cannabis patients exempt from Ann Arbor's tax?
Where can I buy cannabis in Ann Arbor?
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