FEDERAL POLICY BRIEF: 2026 ELECTION CYCLE

SUBJECT: Ending Federal Financial Discrimination against Michigan’s Cannabis & Hemp Industries

DATE: June 30, 2026

PREPARED BY: Michigan Cannabis Community Coalition (MCCC)

IN PARTNERSHIP WITH: Michigan Weedsters & MiNORML

EXECUTIVE OVERVIEW

Michigan is currently the second-largest cannabis market in the United States, yet our small businesses are treated as criminal enterprises by the federal tax code. For Michigan to remain competitive in the global industrial hemp and cannabis markets, federal representatives must prioritize the removal of IRS Section 280E and ensure Michigan farmers can access the international supply chain without fear of federal interference.

THE PROBLEM: FEDERAL-STATE CONFLICT & ECONOMIC STAGNATION

Despite Michigan's robust regulatory framework, the federal government’s refusal to deschedule cannabis creates three primary barriers for Michigan constituents:

● The 280E Tax Penalty: Federal law prohibits cannabis businesses from deducting ordinary business expenses. This results in effective tax rates of 70% to 90%, draining capital out of Michigan and preventing local small businesses from reinvesting in their communities.

● Banking & Credit Access: Small Michigan operators lack access to traditional SBA loans, low-interest lines of credit, and merchant services, forcing a "cash-only" environment that creates a public safety risk.

● Hemp Export Barriers: While the 2026 Farm Bill expanded industrial hemp protections, Michigan’s "Safe Harbor" (1.0% THC) fiber and grain products still face bureaucratic hurdles at the federal level that limit international export potential.

ECONOMIC IMPACT: THE MICHIGAN STAKE

Federal inaction directly harms Michigan’s 2026 economic trajectory.

Metric Michigan Federal Interest

Tax Inequity Millions in local capital diverted to the IRS that should be used for Michigan jobs.

Global Trade Michigan’s auto-grade hemp fiber (Heartland/Detroit) is currently restricted from key international markets.

Public The "Cash Economy" leaves Michigan dispensaries vulnerable to crime due to lack of Safety federal banking parity.

FEDERAL LEGISLATIVE SOLUTIONS

We urge Michigan’s Congressional delegation and U.S. Senate candidates to champion:

1. Full Descheduling of Cannabis

Move cannabis from the Controlled Substances Act entirely. This is the only permanent solution to eliminate the 280E tax burden and allow Michigan businesses to operate with the same financial transparency as any other agricultural or retail sector.

2. Passage of the SAFER Banking Act

Ensure that Michigan’s state-licensed businesses can access the federal banking system. This provides transparency, reduces crime, and allows small businesses to compete for the same low-interest capital available to large corporations.

3. Support for the 2026 Industrial Hemp "Safe Harbor"

Codify the 1.0% Total THC limit for industrial fiber and grain. Federal candidates must protect Michigan farmers from "hot crop" seizures when growing for non-ingestible uses like Hempcrete and automotive bioplastics.

THE BOTTOM LINE

Federal cannabis prohibition is a "Tax on Michigan Success." By aligning federal law with the proven success of the Michigan model, you can protect thousands of jobs, unlock billions in local capital, and solidify Michigan’s role as the nation’s industrial hemp hub.

For the MCCC Candidate Questionnaire:

https://docs.google.com/forms/d/e/1FAIpQLSf069Hrrnet6g06XVxvjpauetdJUZwtg1-QnradqhaA7Rfb1g/vie wform?usp=header