Ensuring Fair Transactions: Protecting Michigan's Cannabis Operators from NonPayment
Retailers failing to pay suppliers is a widespread problem creating financial instability, undermining trust, and putting compliant businesses at risk.
The Issue: Non-Payment + No Access to Affordable Credit = Unsustainable Risk
In most industries, delayed payments are manageable. However, cannabis businesses operate in a financial vacuum, making them uniquely vulnerable to non-payment.
While some state-chartered banks and credit unions handle cannabis deposits, they rarely extend meaningful credit — and when they do, it’s not at competitive terms. This leaves licensed operators especially vulnerable:
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Retailers delay or skip payments, forcing cultivators and processors to carry the financial burden.
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Limited access to credit means suppliers can’t bridge gaps through conventional means.
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High-cost capital, if available at all, further squeezes already thin margins.
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Financial risk is pushed upstream, disproportionately impacting the operators that drive production.
The percentage of invoices that go completely unpaid isn’t large, but the percentage that are late is extraordinary. In an industry operating on razor-thin or negative margins, timing is everything. Delayed payments routinely put payroll, utilities, and other critical obligations at risk. With no access to traditional credit and limited cash reserves, compliant operators are left with no cushion, no recourse, and no room for error.
The Solution: Establish Payment Protections that Reflect Industry Reality
To create a fair and functional supply chain, Michigan must implement basic financial safeguards that are standard in other regulated industries. These protections aren’t radical — they’re long overdue.
MCC recommends the following reforms:
Enforceable payment timelines
Require licensees to pay invoices within a defined window (e.g., net 15 or net 30), bringing cannabis in line with standard commercial terms.
License accountability for non-payment
Allow the CRA to take disciplinary action — including fines, license holds, or suspensions — against repeat offenders who fail to pay licensed suppliers.
Dispute resolution tools
Create a formal process for suppliers to report and resolve payment issues through CRA oversight or independent mediation.
These are not burdensome regulations — they are foundational protections that bring financial structure to a market that currently lacks it.
Why It Matters: Reliable Payments Are the Foundation of a Functional Market
No industry can function without confidence that payment will be made — and made on time. In cannabis, predictable cash flow isn’t a luxury — it’s a requirement for survival.
Stabilize Licensed Suppliers
By reducing cash flow uncertainty, these protections allow cultivators and processors to operate with greater financial security.
Encourage Reinvestment
Predictable payments enable businesses to reinvest in quality, compliance, labor, and innovation, fostering industry growth.
Preserve Trust
Reliable payment systems build confidence across the supply chain, preventing disputes from escalating into breakdowns and fostering stronger relationships.
Support Long-Term Viability
Especially crucial for smaller operators who cannot absorb weeks or months of delayed revenue, ensuring their survival and market diversity.
Fixing this issue won’t cost the state a dollar — but failing to fix it will continue to cost Michigan jobs, businesses, and credibility in its regulated system. While enforcement and accountability are essential, the most effective long-term solution is restoring sustainable margins. When operators are financially viable, payments become timely, relationships stabilize, and the entire supply chain functions as it was intended.
MCC’s Position & Call to Action
The Michigan Cannabis Coalition (MCC) is committed to building a fair, sustainable, and fully functional cannabis market — and that starts with ensuring licensed operators are paid on time and in full.
Our Priorities:
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Restore sustainable margins, because financial viability is the foundation of timely payments and a stable supply chain.
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Enforceable payment timelines to bring predictability and fairness to every transaction.
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CRA oversight and consequences for licensees who consistently fail to meet payment obligations.
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Dispute resolution tools to empower operators and reduce risk without litigation.
Take Action Now:
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Operators and stakeholders: Join MCC to help drive practical reforms that protect your business and strengthen the market.
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Policymakers: Support common-sense payment protections that bring cannabis in line with every other regulated supply chain.
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Learn more and get involved by joining the MCC.
