Advocating for a Sustainable Michigan Cannabis Market
Exploring key issues and solutions for a fair, safe, and viable cannabis industry in Michigan.
Our Core Advocacy Areas
This section introduces the critical areas where policy reform is urgently needed to protect Michigan's cannabis operators and consumers. Each area represents a vital component of a healthy and equitable market.
Licensing Moratorium
Addressing oversupply and market saturation to ensure stability for existing compliant businesses.
Hemp Regulation
Establishing clear rules to prevent unregulated hemp from undermining the legal cannabis market.
Consumer Safety
Banning dangerous synthetic cannabis products to protect public health and maintain product integrity.
Payment Solutions
Advocating for stable and accountable payment systems for cannabis businesses.
No Wholesale Tax
Opposing new wholesale taxes that harm struggling operators and stifle small businesses.
Regulatory Refocus
Shifting the CRA's approach from punitive measures to a supportive, collaborative partnership with operators.
Market Stability: The Need for a Licensing Moratorium
This section explains why a temporary pause on new cannabis licenses is crucial for stabilizing Michigan's oversupplied market. It details how unchecked expansion has led to unsustainable conditions for compliant operators and outlines the benefits of a moratorium.
The Problem: Oversupply & Removed Barriers
Michigan's initial cannabis program promised controlled licensing and meaningful barriers to entry. Instead, the CRA has removed almost all barriers to entry, leading to an effectively unlimited licensing environment. Thousands of plants came online without market safeguards, creating a severe oversupply that drives prices below production costs.
Legal operators are forced to sell below cost or face shutdown.
The gray market thrives, undermining legitimate businesses.
Public trust and industry confidence in the regulatory agency have eroded.
The Solution: A Licensing Moratorium
A temporary moratorium on new cultivation and processing licenses, implemented through regulation, would allow the market to rebalance. This is not about limiting growth indefinitely, but about restoring structure and viability.
Allows existing compliant businesses to achieve profitability.
Reduces market saturation and stabilizes wholesale prices.
Provides the regulatory agency time to implement more robust market controls.
Ensures a sustainable future for Michigan's legal cannabis industry.
Ensuring Fair Play: Addressing Hemp Regulation
This section highlights the challenges posed by unregulated hemp products and their impact on the legal cannabis market. It emphasizes the need for clearer regulations to prevent unfair competition and protect consumers.
The Challenge: Unregulated Hemp
The current regulatory landscape isn't clear for hemp operators and creates **an** opening for a grey area where hemp-derived products, often containing intoxicating cannabinoids, are sold outside the regulated cannabis framework. This creates an unfair playing field for licensed cannabis operators who adhere to strict testing, taxation, and compliance standards.
Unregulated products bypass rigorous safety testing, posing potential consumer risks, especially as these untested products are widely available and falling into the hands of children (e.g., recent incidents with THCa products purchased at gas stations).
They avoid the 10% excise tax, leading to lost state revenue.
They directly compete with regulated cannabis, further depressing prices for compliant businesses.
The lack of direction causes the Michigan hemp industry to fall behind.
Our Call to Action: Clearer Hemp Regulation
We advocate for comprehensive regulations that clearly define and control the sale of intoxicating hemp-derived products. This would ensure all products containing cannabinoids are subject to the same safety standards and taxation.
Level the playing field for licensed cannabis businesses.
Increase state tax revenue by bringing all intoxicating products into the regulated market.
Enhance consumer safety through mandatory testing and labeling.
Create clarity for hemp derived products and promote Michigan hemp farmers.
Protecting Consumers: Banning Dangerous Synthetic Cannabis
This section addresses the urgent need to ban dangerous synthetic cannabis products that pose significant health risks to consumers. It outlines the threats these unregulated substances present and our advocacy for stronger consumer protections.
The Threat: Synthetic Cannabinoids
Synthetic cannabinoids, often marketed deceptively, are chemically engineered substances that mimic the effects of THC but can have unpredictable and dangerous side effects. These products are often found in unregulated markets and lack the rigorous testing and oversight of legal cannabis.
Known to cause severe adverse health effects, including seizures, psychosis, and organ damage.
Lack of regulation means unknown ingredients and inconsistent potency.
Undermine the safety and credibility of the legitimate cannabis market.
Our Advocacy: A Complete Ban
We advocate for a complete ban on the sale and distribution of dangerous synthetic cannabis products in Michigan. This is a crucial step to safeguard public health and ensure that only safe, tested, and regulated cannabis products are available to consumers.
Prioritize public health and safety above all else.
Prevent harmful products from reaching Michigan consumers.
Reinforce the integrity and safety standards of the regulated cannabis industry.
Expand testing services to include dangerous processing chemicals used to create synthetic, intoxicating cannabis products.
Ensuring Fair Transactions: Addressing Non-Payment in the Industry
This section addresses the critical issue of non-payment from retailers to suppliers, a problem that severely impacts the financial stability of licensed cannabis operators. We advocate for robust industry controls to ensure fair and timely transactions.
The Problem: Uncontrolled Non-Payment
Unlike mature industries such as alcohol, the Michigan cannabis market lacks adequate controls to prevent retailers from accepting product, selling it, and then failing to pay their suppliers. This widespread issue creates immense financial strain for cultivators and processors, threatening their operational viability.
Suppliers face significant losses due to unpaid invoices.
Disrupts cash flow for cultivation and processing businesses.
Creates an unstable and unfair business environment.
Our Advocacy: Implementing Payment Controls
We are advocating for the implementation of industry-specific controls, similar to those found in the alcohol industry, to ensure timely and guaranteed payment for cannabis products. These controls would create a more secure and equitable financial ecosystem for all licensed operators.
Establish mechanisms to ensure retailers fulfill their payment obligations.
Protect suppliers from financial exploitation and insolvency.
Foster trust and stability within the cannabis supply chain.
Protecting Financial Health: Opposing the Wholesale Tax
This section outlines our strong opposition to the proposed wholesale tax on cannabis products. We believe this tax would severely damage the industry's financial health, disproportionately impact small businesses, and consolidate power among large, vertically integrated enterprises.
The Problem: An Unnecessary Burden
Michigan cannabis operators are already struggling with razor-thin margins and intense market pressures. Introducing a new wholesale tax would add a significant financial burden, further eroding profitability and pushing more businesses towards insolvency.
Increases operational costs for cultivators and processors.
Disproportionately impacts small and independent businesses who lack the economies of scale of larger corporations.
Creates a barrier to entry and growth for new entrepreneurs in the market.
Incentivizes vertical integration, stifling competition and market diversity.
Our Advocacy: Reject the Wholesale Tax
We urge policymakers to reject any proposed wholesale tax on cannabis. Instead, focus should be on creating a stable and equitable market that allows all licensed operators to thrive, ensuring long-term tax revenue through a healthy, competitive industry.
Protect the financial viability of existing cannabis businesses.
Promote a diverse market with opportunities for small and medium-sized enterprises.
Ensure a fair and sustainable tax structure that supports, rather than burdens, the industry.
Prevent further market consolidation and encourage healthy competition.
A New Regulatory Approach: Partnership Over Punishment
This section calls for a fundamental shift in the regulatory agency's approach, moving from a punitive stance to one of partnership and support. It argues that collaboration, rather than harsh penalties for minor technical violations, will foster a healthier and more compliant industry.
The Current State: Punitive Enforcement
Many operators report a regulatory environment characterized by strict enforcement and significant penalties for even small, technical violations. This approach can stifle innovation, disproportionately affect small businesses, and create an adversarial relationship between regulators and licensees. **Last year, Michigan issued 37% of all cannabis-related violations in the country, totaling $3.72 million in fines.**
Disproportionate fines and license suspensions for minor infractions.
Focus on "catching" violations rather than guiding compliance.
Discourages open communication and collaboration with the regulatory body.
The disciplinary system is one-sided: the CRA acts as police, prosecutor, judge, and jury. Licensees lack discovery rights, the burden of proof is low (preponderance of evidence), and administrative law judges cannot influence penalties, leaving licensees with little recourse but to accept initial settlement offers for clear violations.
Our Vision: Collaborative Regulation
We advocate for a refocusing of the regulatory agency to prioritize education, guidance, and restorative justice. A collaborative approach would build trust, improve overall compliance, and foster a more robust and sustainable industry.
Implement tiered enforcement with a focus on education for first-time or minor violations.
Establish clear pathways for operators to correct issues without severe penalties.
Foster a partnership where the agency supports business success while ensuring public safety.
Economic Overview: Michigan's Price Reality
This chart provides a powerful visual comparison of cannabis prices, highlighting just how unsustainable Michigan's current market is for producers. Hover over each bar to see the average retail price per ounce, illustrating the urgent need for price stabilization and its impact on tax revenue.
Even with modest price adjustments, Michigan would remain the most affordable legal market east of the Mississippi, preserving its competitive advantage while strengthening its tax base and enforcing pricing integrity.