Michigan Cannabis Sales Set a Monthly Record in June 2023

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Michigan cannabis sales rose 6.0% in June from the longer May to a record $260.8 million. On a per-day basis, sales grew 8.8%. The growth of 39.2% from a year ago was up from the 31.9% level last month:

The Michigan Cannabis Regulatory Agency breaks out sales by medical and adult-use, with medical sales falling 69.1% from a year ago to $6.6 million, down 5.8% sequentially, and adult-use sales expanding 53.2% year-over-year to $254.2 million, up 6.4% sequentially:

The state breaks out sales by category and provides pricing detail by category, for both medical and adult-use:

MEDICAL/MMFLA CANNABIS SALES

ADULT USE CANNABIS SALES

As supply continues to expand, flower pricing for adult-use has seen a dramatic decline. In May, the average price of $1428 per pound fell sequentially, losing 1.5% and falling 27.1% from a year ago:

Michigan cannabis sales expanded 82.1% in 2021 to $1.79 billion and were up 27.9% in 2022 at $2.29 billion. So far in 2023, sales have grown 38.5% compared to the first six months of 2022. The program should continue to expand ahead as supply becomes more available and as distribution expands.

FinCEN Issues Initial Beneficial Ownership Information Reporting Guidance

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MMFLA Regulatory Assessments FY 2024

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Revised Confirmation of Tax Compliance Attestation for Medical and Adult-Use Applicants/Licensees

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In consultation with the Department of Attorney General and the Department of Treasury, the Cannabis Regulatory Agency (CRA) has revised the Confirmation of Tax Compliance Attestation (Treasury Attestation) for initial and renewal applications. The medical and adult-use treasury attestations have been revised and updated on the website. This revision is intended to align the application process with the statutory and administrative rule requirements, specifically, whether the applicant is delinquent in the payment of any tax required under federal, state, or local law for one or more years. Effective with today’s notification, applicants and licensees that submit the Treasury Attestation to the CRA are required to utilize the updated form as part of the application process. Failure to utilize the correct form will result in a notice of deficiency being sent and a delay in the timely processing of the application.

Additionally, the instruction booklets for the medical and adult-use applications have been updated to be consistent with the revised treasury attestations. Please note, the CRA has inserted into the instruction booklets additional guidance received from the Department of Treasury regarding how a delinquency is defined. This will impact how the attestation will be completed by the Department of Treasury and subsequently how the CRA will utilize the completed form when making licensing determinations consistent with the statute and administrative rules.

Please see the Department of Treasury guidance below:

To assist in the completion of this attestation, please note that the Department of Treasury defines delinquency as follows:

  1. For underpaid or no remittance tax returns, a taxpayer is considered “delinquent” in the payment of the required tax if the amount due indicated on the return has not been paid in full by the due date of the return.
  2. For post-return adjustments made by Treasury such as adjustments made when the return is processed, or as part of the audit process, a taxpayer is considered “delinquent” in the payment of the tax deficiency on the date that Treasury issues an assessment (Final Bill for Taxes Due) with respect to the determined deficiency.
  3. For “failure to file” situations, the taxpayer is considered “delinquent” in the payment of the tax at issue beginning on the day following the due date of the return that was required, but was not filed.

For questions or concerns regarding the updated Treasury Attestation please reach out to the CRA via email: CRA-AdultUseLicensing@michigan.gov. For questions or concerns regarding the status of your account with Treasury and any potential delinquency, please reach out to the Department of Treasury via email: Treas-MI-Marihuana-Tax@michigan.gov

Michigan’s Cannabis Regulatory Agency Notifies Consumers of Voluntary Marijuana Product Recall

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In the interest of public health and safety, the Cannabis Regulatory Agency notified consumers today of a recall of marijuana-infused edible products. Bloomfield Development Group Grow, LLC dba Golden Shores Cannabis Company (Bloomfield) – in coordination with the Cannabis Regulatory Agency (CRA) – is voluntarily recalling a limited amount of marijuana-infused edible products due to non-compliant creation and packaging.

The products were created containing 200 mg of THC per serving, which exceeds allowable concentration amounts. In addition, the product packaging is not child resistant as required by the administrative rules. The product is labeled as “The Weed Bar” without the required product modifier stating, “marijuana product,” “THC product,” or “cannabis product.”

Consumers who have these products in their possession should return them to the marijuana sales location for proper disposal. Consumers who have experienced adverse reactions after using these products should report their symptoms and product use to their healthcare providers. Consumers are encouraged to also report any adverse reactions to marijuana product to the CRA via email at CRA-Enforcement@michigan.gov or by phone at 517-284-8599.

Questions about this recall should be emailed to the CRA’s Operations Support Section at CRA-Compliance@michigan.gov.

Michigan’s Cannabis Regulatory Agency Takes Disciplinary Action against Mt. Morris Processor

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In order to ensure the health, safety, and security of the public and integrity of the state’s marijuana business operations, today the Cannabis Regulatory Agency (CRA) announced disciplinary action against Sky Labs, LLC, located at 9421 N. Dort Hwy, Mt. Morris, Michigan 48458. Sky Labs will surrender its medical processor license, have stringent compliance requirements placed on its adult-use processor license, and must pay a $100,000 fine.

“When businesses don’t follow the laws and rules that govern the cannabis industry, it is important that they be held accountable for their actions,” said CRA Executive Director Brian Hanna. “It is vital to the health and safety of the public that all licensees in Michigan’s cannabis industry abide by the rules and laws that are in place to protect the public.”

The stringent compliance requirements contained in the consent order and stipulation require Sky Labs to do the following regarding its adult-use processor license:

  • Submit to a full onsite audit conducted by CRA staff and correct any deficiencies.
  • Provide a copy of all standard operating procedures to the CRA.
  • Provide a copy of all logs maintained on a monthly basis, for 12 months.
  • Submit payment for the $100,000 fine.

If Sky Labs fails to timely comply with the terms of this order, its license will be suspended until compliance is demonstrated. The details of Sky Labs’ violations can be found in the disciplinary documents issued by the CRA (link, link, link, link).

To summarize, in part:

In spring 2021, Sky Labs had marijuana vape cartridge concentrates fail safety compliance testing for banned chemical residues. In addition, Sky Labs had a product fail safety compliance testing for Vitamin E Acetate, a target analyte banned for inhalation by the Food and Drug Administration (FDA). During the investigation to determine the cause of these failures, the CRA discovered the record of formulation used in the production of the concentrate did not include the minimum requirements and did not include the test results for the terpenes used in the concentrate.

In September 2021, during an inspection, the CRA observed eleven employees actively working in the production of marijuana products who were not trained on safe food handling and were not in the possession of food handling training certificates. The CRA also observed Sky Labs producing, packaging, and storing vape cartridges in a back trailer without a working video surveillance system. In addition, the CRA observed pre-rolls without statewide monitoring system (Metrc) tags affixed to the pre-rolls, bags, or storage bins. This marijuana product could not be identified on any manifest or in the statewide monitoring system as being sourced from a licensed grower.

In December 2021 and January 2022, CRA audits were performed for multiple Metrc packages tags (packages) from Sky Labs’ inventory; these packages previously received full compliance testing. The packages tested first were not the same packages that were tested for the second time, and/or the packages were not in the same condition at the time of the second testing, even though all the products contained in the packages were sampled from the same Metrc package tag.

In June 2022, Sky Labs distributed Chewii Sour Cherry Edibles to employees of the adult-use processor establishment. Ten employees each received one package containing 20 pieces each. Sky Labs admitted the packages were mislabeled and as a result, were distributed to employees as trade samples. The labels on the edibles displayed a large sticker showing “200 MG CBD” and Sky Labs did not place a THC amount or modifier anywhere on the packages. An employee provided the edibles to her 4-year-old child. The child consumed two edibles which contained 20 mgs of marijuana. The child became seriously ill and was hospitalized due to adverse reactions to the marijuana edibles. A police report was filed with the Davison City Police Department and an investigation was opened with Child Protective Services.