Lansing, MI--Industry stakeholders gathered at Michigan's Cannabis Regulatory Agency's (CRA) quarterly meeting on Thursday to share their thoughts on proposed rule changes. The in-person and virtual meetings saw lively discussions around several proposed rules, with many participants expressing concerns about the potential impact on operational costs and profitability.
According to a Detroit Free Press report, one proposed rule requiring additional testing of pre-rolled cannabis products sparked debate. Some stakeholders questioned the need for testing the final product if the cannabis flower used was already tested. Another contentious point was a proposed rule for standard terpene profile testing of cannabis flower.
"While we understand many of these changes may be necessary, many of our clients feel that a lot of these (proposed rules) would unnecessarily drive up operational costs and make it harder and harder for them to serve the market and remain profitable," a caller, who identified himself as Sam Paulus with Urban Legal Group, said, as per the report. "Already being one of the most heavily regulated industries, additional burdens are always met with skepticism."
The report noted that participants largely backed a proposed rule allowing the CRA to deny license renewals based on unpaid debts resulting from work, services, products, or equipment. With the cannabis industry growing increasingly competitive, the issue of businesses failing to pay their bills has become more common.
"Right now, repeat offenders who routinely place large orders with seemingly no intention of ever paying the vendors are creating a ripple effect of financial harm throughout our industry," said Robin Schneider, executive director of the Michigan Cannabis Industry Association, as per the report.
The report noted that John Fraser of the law firm Dykema’s cannabis practice highlighted the negative implications of this proposed rule. He pointed out that stripping a company of its license would ensure that creditors never get paid, given that such businesses wouldn't make any money.
In the report, Fraser suggested that a more effective solution might be for the CRA to liaise with the state legislature to authorize county sheriffs to seize goods about a judgment. "At the end of the day, the goal here should be to try as much as possible to treat marijuana businesses like any other business," he added, per the report.
The proposed rules are currently undergoing a formal public hearing process. David Harns, a CRA spokesperson, indicated that the rules could go into effect early next year.
Learn more in the Detroit Free Press report.