Michigan Senators Weigh Marijuana Regulatory Reform Bills To Aid Industry Reeling From New Tax Increase

*“Our members are asking this committee to assist our industry in creating
market stability and thoughtful and collaborative industry planning moving
forward.”*

*By Kyle Davidson, Michigan Advance*

Nearly two weeks after Michigan lawmakers took up legislation instituting a
24 percent tax on wholesale marijuana, members of the Senate Regulatory
Affairs Committee heard testimony on multiple bills which committee chair
Jeremy Moss (D-Southfield) said were aimed at reducing the regulatory
burden on the cannabis industry.

Up for consideration on Wednesday were two packages of bills, one limiting
the number of licenses for marijuana retailers and provisioning centers,
and another aiming to address the sale of unregulated intoxicating hemp
products, though Moss noted there would be additional meetings on the bills
in the future.

Sen. Sam Singh (D-East Lansing) explained that the first package, Senate
Bills 597 and 598, would cap licensing for marijuana retailers and
licensing for wholesalers to one license per 10,000 residents in a
municipality beginning January 1, 2026, similar to how the state regulates
liquor sales.

Communities with fewer than 10,000 residents would always have at least one
license, Singh said.

Additionally, the bills allow current license holders to renew their
licenses or transfer them to another individual.

The second set, Senate Bills 599–602, would create a regulatory framework
for consumable hemp products in Michigan, Sen. Dayna Polehanki (D-Livonia)
explained, noting that intoxicating products made from hemp, including
Delta-8 and other synthesized cannabinoids are being sold in Michigan gas
stations, convenience stores and online without oversight or testing.

Both proposals received support from the Cannabis Regulatory Agency–which
regulates Michigan’s adult-use cannabis industry–as well as several members
of the state’s cannabis industry.

Derek Sova, a policy and legislative specialist for the agency, said one of
the challenges the agency is presently facing is that of marijuana versus
hemp, when the conversation should be on whether a substance is
intoxicating or non-intoxicating.

Conventionally the understanding is that hemp is a crop or a textile, Sova
explained, with both Michigan and the federal government’s definition of
hemp and marijuana allowing for the unregulated sale of products with large
amounts of THC–the component in marijuana that is primarily responsible for
its intoxicating effect.

“Because of the way the definition is, they are considered hemp, and
because of that, they are not age-gated. There’s not a requirement for
testing, like there is in Michigan with marijuana products. There are not
restrictions on labeling,” Sova said.

Alongside setting up a regulatory framework for non-intoxicating consumable
hemp products, like CBD-infused gummies, and intoxicating hemp products,
Sova noted the bill package would deregulate the sale of nonconsumable
hemp, which is used to make textiles and building materials.

“Right now, under the current law, you have to get a license to make that,
license to sell that. In our opinion, that doesn’t seem like it’s something
that needs to be regulated,” Sova said.

Robin Schneider, executive director of the Michigan Cannabis Industry
Association offered her support for capping licensing of marijuana
provisioners and retailers, noting that unlimited licenses for marijuana
cultivation has led to an oversupply, causing a drop in wholesale prices
and bringing harm to businesses all the way down the supply chain.

Additionally, the proliferation of retail spaces has led to public nuisance
concerns, traffic issues and complaints from communities, Schneider said.

“Our members are asking this committee to assist our industry in creating
market stability and thoughtful and collaborative industry planning moving
forward, so that at the very least they can make business decisions based
on projections that include predictability,” Schneider said.

The association also supported regulating intoxicating hemp products,
noting that these products are being shipped into Michigan from out of
state, and are not produced by Michigan hemp farmers.

“Not only have our hemp farmers been left out and harmed in many ways, but
current law does not even allow them to manufacture CBD-only consumable
hemp products in Michigan,” Schneider said.

Kyleigh Cumming, the lab director for Kairos Labs, a cannabis testing lab,
told committee members that the 2018 farm bill which defined hemp created a
loophole that allowed for the conversion of CBD into compounds similar to
THC.

“These conversion processes create many dangerous and unknown byproducts
along the way, while also allowing products created to be marked as
hemp-derived and sold in Michigan as unregulated, intoxicating vapes,”
Cumming said.

In a study of 15 vape products purchased in multiple Southeast Michigan
communities, Cumming said the products had no lab testing results or
traceability, and when acquiring the products, nobody asked for an ID to
check for age. When the products were tested, the lab found 15
contaminants, and all 15 samples detected THC levels above the .3 percent
level set by the federal government.

While offering support for additional regulations on hemp products,
Kimberly James, the director of cannabis affairs for the City of Detroit
called for more teeth in the bill to allow local governments to take action
when intoxicating hemp products are being sold at unlicensed locations.

“The [Cannabis Regulatory Agency] currently does not enforce violations of
the [Michigan Regulation and Taxation of Marihuana Act] against
non-licensees, and I wouldn’t expect that it could enforce violations of
this act against anyone who’s not a licensed consumable hemp processor,”
James said. “Local governments need to have the authority to stop this
practice immediately when products are in a regular store and explicitly
state they contain THC.”

Polehanki promised to work with James to ensure these changes were made,
saying the legislation is “no good unless these products can be taken off
the market.”

Blain Becktold, the founder of iHemp Michigan, which represents hemp
farmers, manufactures and businesses statewide, said the group’s members
supported denying or restricting the sale of products that could cause harm
when purchased or consumed, but took issue with its definition of hemp as
cannabis with less than 0.3 percent THC, pointing to a federal push to
increase that threshold to 1 percent.

“That’s not to make more intoxicating products. That’s really for the
safety of the growers and the farmers. If they invest that time, money and
effort into the crop, and it goes hot over .3, then they’ve lost all that.
At 1 percent we really wouldn’t have that problem,” Becktold said.

Cassin Coleman of Cannabis Consumer Advocacy also raised concerns on the
proposed regulations, noting that the limits on THC on nonintoxicating hemp
products would limit access to certain products used by individuals for
medical purposes.

“As is often the case, products that patients are using consistently, that
are CBD products, they do contain THC,” Coleman said, noting that these
products contain THC because they are “full spectrum” meaning they contain
the full range of compounds that occur in the cannabis plant.

By trying to remove or limit the amount of THC in these products, other
important cannabinoids, plant proteins and antioxidants would be removed,
Coleman said, warning that could make these products less effective.

*This story was first published by Michigan Advance.*

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