Michigan Cannabis Regulatory Agency outlines growth and future challenges in industry

The Michigan Appropriations Committee meeting on April 17, 2025, focused on the cannabis regulatory landscape, highlighting significant developments and challenges faced by the Cannabis Regulatory Agency (CRA). Brian Hanna, the executive director, and Derek Sova, the policy and legislative assistant, presented an overview of the agency's responsibilities and the rapid growth of the cannabis industry in Michigan.

The CRA oversees four key statutes related to marijuana regulation, including the Medical Marijuana Act and the Adult Use Act. Since the issuance of the first licenses in 2018, the number of licensed cannabis businesses has surged to over 4,000, reflecting an exponential growth trend from 2021 to 2024. This growth has led to increased complaints and the need for enhanced regulatory oversight.

In response to an audit by the Office of the Attorney General, the CRA's budget for fiscal year 2025 includes the addition of nine full-time employees to improve inspection and disciplinary processes. The agency aims to reduce wait times for inspections and enhance safety measures within the industry, emphasizing the importance of fire safety and health standards.

The meeting also addressed the financial aspects of cannabis regulation, with discussions on license fees. While Michigan's fees are higher than some states, they remain competitive nationally. The CRA has managed to lower fees over the years, but recent increases were necessary to cover rising operational costs.

A significant concern raised during the meeting was the challenge of regulating new, potentially harmful products entering the market due to loopholes in federal legislation. The CRA is working on establishing a reference laboratory to ensure accurate testing and to combat illicit activities within the cannabis market. This lab is expected to enhance consumer safety and support law enforcement efforts.

The CRA is also focused on supporting small businesses, particularly microbusinesses, by revising regulations to allow them greater flexibility in operations. The agency has engaged with industry stakeholders to gather feedback and implement changes that promote business viability.

Overall, the meeting underscored the CRA's commitment to establishing Michigan as a national model for cannabis regulation while addressing the complexities and challenges that come with a rapidly evolving industry. The agency is poised to continue adapting its strategies to ensure consumer safety and support legitimate businesses in the cannabis sector.