Michigan Properly Denied Tax Breaks to Medical Cannabis Supplier

A medical marijuana dispensary can’t deduct ordinary and necessary business expenses from its Michigan corporate income taxes as retail pot sellers are allowed to do, a state appeals court ruled in an opinion released Wednesday.

Cannarbor Inc. challenged the Michigan Department of Treasury’s assessment of about $139,000 in taxes and interest for 2019 and 2020 based on its rejection of the deduction, arguing that the state’s different tax treatment of recreational and medical marijuana businesses is unconstitutional.

The Michigan Court of Appeals sided with the state, holding that the voter initiative that legalized recreational pot and created the deduction was ...