Hit Pause to Save the System: The Case for a Licensing Freeze in Michigan Cannabis
Unchecked licensing has led to oversupply, unprofitability, and market dysfunction. A temporary freeze on all new licenses is crucial to stabilize the market and protect the future of Michigan's regulated cannabis economy.
The Issue: Oversupply and License Saturation Are Crippling the Market
Michigan’s cannabis market is flooded — not just with product, but with licenses. The number of cultivation, processing, and retail operations has outpaced actual demand, creating a structural oversupply that has driven wholesale prices down and made profitability nearly impossible for most operators. This isn’t a normal market cycle; it’s a systemic imbalance.
Excess Cannabis Production
A massive oversupply exists with no mechanism to align output with actual consumer demand, leading to price crashes.
Thousands of Active Licenses
Every vertical is saturated, from cultivation to retail, creating intense and unsustainable competition across the supply chain.
Margins at or Below Zero
Many compliant businesses are operating unprofitably, unable to cover their costs due to severely depressed wholesale prices.
Risk of Collapse & Illicit Resurgence
Without intervention, licensed operators will continue to fail, opening the door for the illicit market to undermine safety and tax revenue.
Why a Licensing Freeze Is the Right Move
A temporary freeze on all new cannabis licenses is a necessary first step toward restoring stability. This isn't about limiting opportunity, but protecting the opportunity that already exists for compliant operators who invested heavily in doing things the right way.
Stop the Bleeding
Halts the influx of new supply and competition into an already saturated market, preventing further financial deterioration.
Path to Sustainability
Allows margins to normalize for existing operators, enabling reinvestment in quality, compliance, and labor.
Regulator Reassessment
Provides space for regulators to improve oversight and develop data-driven tools to manage future market capacity effectively.
Reaffirm Compliance Value
Sends a clear message that Michigan intends to protect its licensed system and reward those who play by the rules.
No well-regulated market can thrive without guardrails. The licensing flood has created artificial growth divorced from consumer demand — and now it’s time to hit pause, recalibrate, and protect Michigan’s licensed system and the operators who trusted the CRA and the state to create a feasible, functional market.
Beyond the Moratorium: Building a Viable Market
A licensing freeze is only the beginning. Michigan must use that pause to build a cannabis market that is accountable, transparent, and sustainable — not just for today, but for the long term. The goal isn’t just to stop collapse — it’s to create a system that finally delivers on the original promise.
Key policy priorities include:
Restoring supply and demand alignment
Stop incentivizing unchecked expansion and begin evaluating statewide capacity against real consumer demand.
Enforcing a single regulated system
Crack down on unlicensed actors and close loopholes that allow hemp-derived and synthetic THC products to flow into the regulated space without equivalent oversight.
Prioritizing transaction reliability
Ensure fair business practices across the supply chain, including timely payments, enforceable contracts, and better tools to resolve disputes between licensees.
Improving regulatory accountability
Shift from punitive enforcement toward proactive, data-driven governance that helps licensees succeed while maintaining standards.
MCC’s Position & Call to Action
The Michigan Cannabis Coalition (MCC) is committed to protecting the state’s licensed cannabis market and the operators who built it. We believe that without immediate action — starting with a pause on all new licenses — Michigan risks losing the stability and integrity of its regulated system.
What We Stand For:
-
A Licensing Freeze to Stabilize the Market
-
A Sustainable Framework for Growth
-
A Fair and Reliable Market
-
An End to Illicit Market Resurgence
Take Action Now:
-
Operators and Stakeholders: Join MCC to ensure your voice is heard as we push for urgent reform.
-
Policymakers: Enact a temporary moratorium on all new licenses and commit to building a system that rewards compliance and sustainability.
