Officials from Michigan’s Department of Licensing and Regulatory Affairs last Thursday shuttered 40 cannabis dispensaries and said hundreds more will be closed in coming weeks.
Department spokesperson David Harns told the Detroit Free Press, “Any business that didn’t apply for a license by Feb. 15 isn’t in compliance with the emergency rules that were set up. We did forty today all throughout the state and there will be hundreds more.”
Officials didn’t specify what kind of businesses would be targeted, but cease and desist letters are expected to go out to dispensaries that have not applied for licenses under new regulations and are non-compliant.
“What you’re seeing in Michigan right now are unfortunate growing pains, as we transition from a largely unregulated, cooperative model, to a state-licensed and state-regulated model, and this is the first step,” said Kris Krane, president and co-founder of 4Front Advisors, a U.S. cannabis industry investment firm. “Unfortunately these unregulated [dispensaries] may get shut down, particularly in jurisdiction that weren’t as friendly to them in the first place.”
Krane, a longtime cannabis policy reform advocate, said the situation in Michigan mirrors what happened in other states that had established “grey markets,” prior to establishing infrastructure for licensing regulations and other standard practices. States like Washington, Oregon, and Montana–and, soon, California. For many unlicensed operators, the clock is officially ticking.
“It’s gonna take a little while because a lot of municipalities in California have not gotten around to doing their own licensing, so, the state’s being more understanding with some of these unlicensed businesses, particularly in jurisdictions that haven’t figured out their licensing yet,” Krane said. “I would be surprised if a crackdown doesn’t come–and I don’t know exactly what form that’s going to take.”
Licensed operators, once regulations are implemented, aren’t likely to have much