Michigan regulators warn of illicit grows, unreliable testing and hemp-product risks as cannabis market expands

Lansing — The Cannabis Regulatory Agency (CRA) told the Michigan House Regulatory Reform Committee on Wednesday that the state’s adult-use marijuana market has grown far larger than the medical market, driving license growth, oversupply and a collapse in retail flower prices that is helping sustain unlicensed growing operations and fraudulent testing practices.

Director Brian Hanna and CRA staff member Derek Sova said the adult-use market now accounts for nearly all state marijuana sales and that current laws limit the agency’s tools to cap licenses and quickly discipline bad actors. "Now, today, it is $62," Hanna said of the average retail price per ounce of marijuana, down from previously much higher levels. "We had $2,800,000 was included in that budget to to build and equip the lab," he said, describing state funding appropriated to create a CRA reference laboratory.

The CRA framed the risks as three related problems: large-scale unlicensed cultivation operations, unreliable or fraudulent laboratory testing, and a proliferation of intoxicating hemp-derived products sold outside the regulated marijuana supply chain.

Why it matters: The agency said those three issues together threaten public safety and the regulated industry’s economic viability. Large illicit grows can be operated by transnational criminal organizations, Sova said, and enforcement is hampered when…