Regulators, prosecutors and industry back enforcement changes to target large illicit grows and protect licensed businesses

The House Regulatory Reform Committee on May 20 heard testimony on a package of bills—House Bills 5104, 5105, 5106 and 5107—intended to give regulators and prosecutors more authority to combat large-scale illicit marijuana operations and to protect licensed businesses who follow the rules.

Derek Sova of the Cannabis Regulatory Agency (CRA) described several enforcement gaps the bills aim to close. Two bills would add specific, egregious offenses—such as possessing untaged product and obstructing investigations by withholding required surveillance video—that could justify a summary suspension of a license while the agency proceeds with adjudication. Other measures would allow the agency to continue disciplinary action against an individual who closes or abandons a license to avoid consequences, a power the medical marijuana law already contains and that the sponsors want mirrored for the recreational program.

Prosecutors who testified described prosecution challenges under current law. James Bacarella, a county prosecuting attorney, and Zachary Stemp described cases involving large indoor grows and dangerous butane extraction labs. Bacarella said one raid found 5,057 plants and a 2024 electric bill indicating commercial-scale operations; he described indicators of organized crime, potential human-trafficking vulnerabilities among workers and public-safety risks from unregulated processing. Stemp outlined recent court decisions that have limited felony-level penalties in some manufacturing cases and said the statutory landscape creates prosecutorial uncertainty; he noted some provisions in the proposed bills would clarify those conflicts.

Representative Hoadley, a sponsor, said the bills preserve lawful personal possession ranges and target large illicit operations and organized criminal actors. He described proposed numeric limits on concentrates and cultivated product that would criminalize possession substantially above personal-use quantities.

Industry groups and trade associations spoke in support. Robin Schneider, executive director of the Michigan Cannabis Industry Association, told the committee regulated businesses asked for tools to stop illicit actors who “fraudulently slip” illicit product into the regulated supply chain, crash prices and undercut law-abiding operators. The association and other witnesses urged the legislature to authorize a state reference lab to help identify synthetic or imported products used to defraud the regulated market.

Supporters argued the package will help protect public safety, restore market fairness and give CRA the power to summarily suspend licenses in the face of serious, documented violations. Opponents and some members raised concerns about timing and whether increasing enforcement or penalties could further destabilize a taxed industry already facing high wholesale rates and operating pressures.

No roll-call committee votes on the bills were recorded at the hearing; sponsors and multiple witnesses indicated further technical drafting and coordination with the Department of Attorney General and other stakeholders was ongoing.