Cannabis News Roundup: Week 2025-07: Cannabis Crossroads: New Laws, Tax Hikes & Federal Uncertainty

Week of 15 Feb, 2025

Covered states: Alabama, Idaho, Michigan, Minnesota, Mississippi, New Jersey, Ohio, South Dakota.

As some states embrace cannabis, others are doubling down on restrictions. This week, we cover South Dakota’s push to reduce drug penalties, Idaho’s harsh new cannabis fines, and Michigan’s plan to impose a massive 32% wholesale tax on marijuana. Meanwhile, Ohio wants to double its cannabis tax, New Jersey aims to fast-track medical dispensaries into the recreational market, and Alabama & Mississippi crack down on hemp-derived THC. Plus, we explore how new federal leadership could impact cannabis laws nationwide.

 

 

 

SOUTH DAKOTA

 

South Dakota lawmakers are considering a major shift in the state’s drug laws. Senate Bill 83, which recently passed the Senate Judiciary Committee, would reduce the penalty for first- and second-time drug ingestion offenses from a felony to a misdemeanor. The bill, introduced by Republican Senator Tamara Grove, aims to lower incarceration rates and focus on treatment rather than punishment.

 

South Dakota is the only state where failing a drug test alone can lead to a felony conviction. Supporters argue that this policy traps people in cycles of addiction and poverty while contributing to the state’s high incarceration rate. The state is currently planning an $825 million expansion of its prison system due to overcrowding, raising concerns about the cost of incarceration for nonviolent drug offenses.

 

If passed, SB 83 would require offenders to complete probation and substance abuse treatment instead of serving time in prison. While the bill does not change South Dakota’s cannabis laws, it could signal a shift in how the state handles drug-related offenses. Opponents worry that reducing penalties may weaken deterrence and pose public safety risks.

 

The bill now moves to the full South Dakota Senate for further debate.

 

IDAHO

 

Idaho is poised to reinforce its reputation as one of the strictest states on marijuana policy. A bill that would impose a minimum $300 fine on individuals caught with three ounces or less of cannabis is advancing to the state Senate for a vote. House Bill 7, which cleared the state House last week in a 54 to 14 vote, moved forward along party lines in the Senate Judiciary and Rules Committee, with Republicans supporting the measure and Democrats opposing it.

 

The legislation reflects Idaho’s firm stance against marijuana, even as neighboring states embrace legalization. Supporters, including law enforcement agencies and conservative policy groups, argue that the state must maintain a strong deterrent against cannabis use. Opponents, however, warn that the law would disproportionately harm individuals who use cannabis for medical purposes. Beyond the immediate legal implications, the measure underscores Idaho’s resistance to cannabis legalization, a stance that could deter potential investment in a future medical or recreational market.

 

MICHIGAN

Michigan Governor Gretchen Whitmer has unveiled a controversial plan to impose a 32% wholesale tax on recreational cannabis, a move aimed at raising up to $470 million annually for road repairs. The proposed levy would be added to the state's existing 10% excise tax and 6% sales tax, making Michigan's cannabis taxation among the highest in the nation.

The measure is part of a broader 3 billion DOLLAR  infrastructure initiative, which also includes tax hikes on corporations, digital advertisements, and nicotine products. While Whitmer argues that the plan aligns cannabis taxation with existing tobacco product taxes, industry leaders warn that such a steep increase could cripple Michigan’s $3.3 billion cannabis market.

Critics say the tax hike could drive up retail prices, with estimates suggesting the average price of an ounce of ca