Nik Rajkovic / news@whmi.com

Michigan's new 24-percent tax on wholesale cannabis is now in effect. The bi-partisan budget compromise is meant to raise an estimated $420 million for local road repairs.

The cannabis industry failed to stop the tax in court, and warns of possible shutdowns and layoffs due to the tax. Crains Detroit reports and Ann Arbor-based company is closing its cultivation facility in Webberville.

State Rep. Ann Bollin, chair of the Michigan House Appropriations Committee, thinks those fears are overblown.

"It is a free market. Is a tax going to affect businesses opening or closing? I don't think it's going to have as direct an effect as being played out," she told WHMI News.

"We had a market that was suffering. It was oversaturated. That's the free market working."

The Brighton Township Republic suggested many of her constituents never wanted recreational marijuana in the first place.

"I know there are a lot of upset people, but I'll tell you, there are a lot of people that are very happy and wish would have taxed it more. They don't want to see marijuana in our state."

She added proponents of the move pitched it as a way to raise tax revenue, and that's what state lawmakers are doing.

"The money going to be going down to the local (roads) and it's something we have to continue to invest in," said Bollin.

"We've seen a lot of changes right here in our own area, in Livingston County, a lot on the highways. Now it's time for the bi-ways and driveways."