Wisconsin Governor Puts Marijuana Legalization In Budget Request, Along With Provisions To Regulate Hemp-Derived THC

The governor of Wisconsin has once again included a proposal to legalize marijuana in his biennial budget request.

“Legalize, regulate, and tax the sale of marijuana for recreational use, much like Wisconsin already does with alcohol,” a budget brief that the office of Gov. Tony Evers (D) released on Tuesday says, adding that it will result in “$58.1 million in revenue in fiscal year 2026-27 and growing amounts in future years.”

Under current Wisconsin law, cannabis is illegal for both recreational and medical purposes.

The governor’s proposal would additionally “create a process for individuals serving sentences or previously convicted of marijuana-related crimes to have an opportunity to repeal or reduce their sentences for nonviolent minor offenses.”

“The Governor further recommends the imposition of a 15 percent wholesale excise tax and a 10 percent retail excise tax on the sale of marijuana for recreational use by department-issued permit holders,” it says.

Identical bills to facilitate the budget requests have been filed in both the Senate and Assembly.

In addition to legalizing cannabis for adult use, Evers is proposing to include delta-8, delta-10 THC and other intoxicating hemp-derived cannabinoids in the definition of marijuana to “ensure their production, processing and sale is regulated and not available to individuals under 21.”

Further, the governor is calling for the the Department of Revenue the enter into agreements with tribal territories “for the refund to tribes of marijuana excise taxes estimated to be collected from sales on tribal lands,” similar to current policy with tobacco products.

The companion bills that were filed in tandem with the governor’s budget request stipulate that all revenue collected from the proposed cannabis taxes will be deposited into the state general fund.

“The bill does not affect federal law, which generally prohibits persons from manufacturing, delivering, or possessing marijuana and applies to both intrastate and interstate violations,” a summary of the legislation says.

“The bill changes state law to allow a Wisconsin resident who is at least 21 to possess no more than two ounces of marijuana and to allow a nonresident of Wisconsin who is at least 21 to possess no more than one-quarter ounce of marijuana,” it continues.

Home cultivation of up to six cannabis plants would also be allowed.

When it comes to medical cannabis, a qualifying patient would be defined as someone “who has been diagnosed by a physician as having or undergoing a debilitating medical condition or treatment and who is at least 18 years old.”

The legislation would also prohibit employment discrimination on the basis of off-duty marijuana use, exempts THC from drug testing for certain public assistance programs and protects people from being denied organ transplants due to cannabis consumption.

“The bill creates a process to review convictions for acts that have been decriminalized under the bill,” the legislative summary says. “If the person is currently serving a sentence or on probation for such a conviction, the person may petition a court to dismiss the conviction and expunge the record. If the person has completed a sentence or period of probation for such a conviction, the person may petition a court to expunge the record or, if applicable, redesignate it to a lower crime.”

The Department of Revenue would license and regulate businesses to produce, process, distribute and sell marijuana, with permits awarded using a competitive scoring system. Producers and processors would also need to obtain additional permits from the Department of Agriculture, Trade and Consumer Protection.

Cannabis businesses with 20 or more employees would be required to enter into a labor peace agreement with a labor organization.

Evers previewed his plan to include marijuana legalization in his budget last month, while also arguing that residents of the state should be allowed to propose new laws by putting binding questions on the ballot—citing the fact that issues such as cannabis reform enjoy sizable bipartisan support while the GOP-controlled legislature has repeatedly refused to act.

“The will of the people should be the law of the land. Republican lawmakers have repeatedly worked to put constitutional amendments on the ballot that Republicans drafted, and Republicans passed, all while Republicans refuse to give that same power to the people of Wisconsin. And that’s wrong,” he said.

“Republican lawmakers shouldn’t be able to ignore the will of the people and then prevent the people from having a voice when the Legislature fails to listen,” he said. “That has to change. If Republican lawmakers are going to continue to try and legislate by constitutional amendment, then they should give the people that same power and that’s what I’ll be asking them to do in my next budget.”

Previously, in 2022, the governor signed an executive order to convene a special legislative session with the specific goal of giving people the right to put citizen initiatives on the ballot, raising hopes among advocates that cannabis legalization could eventually be decided by voters. The GOP legislature did not adopt the proposal, however.

Whether the legislature will heed Evers’s latest budget request for the policy change is uncertain. Lawmakers have previously declined to act on his other budget proposals, including those calling to enact legalization of recreational or medical cannabis.

Evers said in December that marijuana reform is one of several key priorities the state should pursue in the 2025 session, as lawmakers work with a budget surplus.

Days after he made the remarks, a survey found the reform would be welcomed by voters in rural parts of the state. Nearly two thirds (65 percent) said they support legalizing cannabis.

Last May, the governor said he was “hopeful” that the November 2024 election would lead to Democratic control of the legislature, in part because he argued it would position the state to finally legalize cannabis.

“We’ve been working hard over the last five years, several budgets, to make that happen,” he said at the time. “I know we’re surrounded by states with recreational marijuana, and we’re going to continue to do it.”

But the GOP-controlled legislature has so far failed to pass even limited medical cannabis legislation, even a conservative bill was filed last January that the Assembly speaker had promoted. Republicans have also consistently stripped marijuana proposals from the governor’s budget requests.

A Wisconsin Democratic Assemblymember tried to force a vote on a medical cannabis compromise proposal last year, as an amendment to an unrelated kratom bill, but he told Marijuana Moment he suspects leadership intentionally pulled that legislation from the agenda at the last minute to avoid a showdown on the issue.

That move came as the GOP speaker retreated on his own limited cannabis legislation that a top Republican senator criticized as anti-free market because it would’ve created a system of state-run dispensaries.

Wisconsin’s GOP Senate president says she’s “hoping to have a conversation” in the legislature this month about legalizing medical marijuana in 2025—though the Republican Assembly speaker still represents “an obstacle,” she added.

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Meanwhile, the state Department of Revenue released a fiscal estimate of the economic impact of a legalization bill from then-Sen. Melissa Agard (D) in 2023, projecting that the reform would generate nearly $170 million annually in tax revenue.

A legislative analysis requested by lawmakers estimated that Wisconsin residents spent more than $121 million on cannabis in Illinois alone in 2022, contributing $36 million in tax revenue to the neighboring state.

Evers and other Democrats have since at least last January insisted that they would be willing to enact a modest medical marijuana program, even if they’d prefer more comprehensive reform.

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Photo courtesy of Philip Steffan.

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