Michigan regulators are looking to remove businesses that don't pay their bills from the state's cannabis industry. In proposed rules released this month, the Cannabis Regulatory Agency is seeking authority to deny licenses to businesses found in court to have not paid vendors. It's a move that would set the industry apart from nearly every other industry in the state. Experts in the industry, however, believe the rule could create havoc in an industry already under financial pressure due to low prices.
The proposed changes to the rule would "allow the CRA to deny a license or license renewal based on civil judgments (and) court orders resulting from unpaid debt for work, services, products, or equipment provided solely in the cannabis industry."
While the CRA declined to comment on the proposed rule change, a document released by the agency states the ability to deny licenses to delinquent businesses would address "a concern that has been raised by many in the industry."
It's true that the recent industry shakeout caused by low prices is leaving many bills past due or unpaid altogether. Michigan's cannabis industry has suffered an epic price collapse due to product oversupply — recreational cannabis retail prices have plummeted from $512.05 per ounce of flower in January 2020 to just $87.76 per ounce in April — effectively eliminating profit margins for businesses across the state.
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