Michigan’s Marijuana Industry Seeks to Limit New Licenses Amid Oversupply and Competition
Michigan’s marijuana industry is facing a crisis of oversupply and low prices, leading to a proposal to limit new licenses for most businesses. The state Senate panel has begun debating a set of bills that would cap the number of new licenses for growing operations, testing labs, and transportation companies.
The proposal, sponsored by state Sen. Sam Singh, would prohibit the state from issuing new licenses for growing operations cultivating more than 150 plants, starting in 2026. It would also cap the number of retail marijuana stores in a given municipality to one for every 10,000 residents. Existing businesses in towns over the limit could continue to operate, but the state could not issue new retail licenses.
The move is aimed at addressing the state’s oversupply of marijuana, which has led to record-low prices and financial struggles for many businesses. According to Crain’s Detroit Business, 13 Michigan marijuana businesses are currently in court-sponsored receivership.
The Michigan Cannabis Industry Association, which represents the state’s marijuana businesses, is backing the proposal. The association’s leader, Robin Schneider, said that unlimited licenses have led to a “perfect storm” of oversupply and low prices, and that the proposal would help stabilize the industry.
However, some small business owners are opposed to the proposal, saying it would stifle competition and limit their ability to grow and expand. Steven Wagner, owner of Alien Tek Farms, said that capping licenses would “essentially freeze us out” from vertically integrating or expanding.
The proposal would also freeze new large grower licenses, allowing only new licenses for smaller Class A growers and microbusinesses. This would limit the number of new businesses that could enter the market.
The legislation would also regulate synthetic and hemp-based marijuana-mimicking products, which have become popular in states where recreational marijuana is illegal. The state’s Cannabis Regulatory Agency would be tasked with regulating these products, which are often sold without age verification or oversight.
The proposal has sparked debate among lawmakers and industry stakeholders, with some arguing that it would create regional monopolies or oligopolies for established dispensaries. Others argue that it would help stabilize the industry and prevent further financial struggles.
The legislation would require three-fourths approval from both chambers of the Michigan Legislature to reach the governor’s desk for signature. If passed, it would be a significant overhaul of the state’s voter-approved marijuana law.
