Michigan trade group wants state to quit issuing new cannabis business licenses

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With adult-use marijuana prices plunging, Michigan’s largest lobbying organization for the state’s MJ industry is asking lawmakers to stop issuing new cannabis business licenses.

The Michigan Cannabis Industry Association said the lack of a cap on business licenses has led to too many retail shops in some communities as some neighboring municipalities impose outright bans on marijuana businesses, according to MLive.com.

The organization also cited heavy illicit-market competition as a reason for price compression in Michigan’s recreational marijuana market.

“It’s because people are continuing to bring in illicit product – conversion oil and other products – into the regulated market,” Robin Schneider, director of the organization, told MLive.com.

“You really have to start to look at: If we can’t get this under control, why are we continuing to issue more licenses?”

Schneider said a moratorium on licenses should be put in place until enforcement is taken against illicit operators, which are undercutting licensed marijuana businesses.

Brian Hanna, director of Michigan’s Cannabis Regulatory Agency, said oversupply is a major issue threatening the market.

“In 2019, the average retail (cost for an) ounce of marijuana flower was over $500,” he told the state Senate Regulatory Affairs Commission on April 23, according to MLive.com.

“Now, today, it’s $65.”

According to CRA data, 857 marijuana stores were licensed to operate in Michigan as of March.

There also were 2,578 licensed cultivators, most of which are allowed to grow up to 5,000 plants at once.

Hanna did not ask the Senate commission for a moratorium on licenses but said that not being able to limit permits hinders the agency from correcting the imbalanced supply chain, MLive.com reported.

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