On Tuesday, September 16, the Chairman of Michigan's House Regulatory Reform Committee, Representative Joseph Aragona, introduced a package of bills to address two significant problems confronting Michigan's cannabis industry—licensees defaulting on payments and unregulated intoxicating hemp products being sold throughout the state. (This is part two of our examination of this issue in Michigan; part one can be found here, and we've addressed hemp issues in other states and at the federal level elsewhere on the Cannabis Law Blog.)
Slow payment and no payment issues are endemic in Michigan's cannabis industry. With struggling retailers and tremendous overproduction, growers and processors demanding payment up front are hard-pressed to sell their wares. (Michigan's Cannabis Regulatory Agency ("CRA") reports show months of unsold inventory and close to a million pounds of fresh frozen waiting to be processed.)
HB 4963 would amend Michigan's adult-use law to require all marijuana licensees to pay for product at the time of transfer. While numerous growers and processors have advocated for this change, not all retailers are in support. Retailers negotiating lower wholesale prices in exchange for immediate payment fear losing a competitive edge. Others argue that it could leave less well-capitalized retailers unable to obtain product. And the lack of a companion amendment to Michigan's medical law may leave loopholes. Nevertheless, comments on proposed CRA rules and at CRA public meetings show what appears to be overwhelming support for HB 4963's concept.
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