Marijuana growers in Michigan, Oregon, and Colorado have been calling for regulators and legislators to place a moratorium on the licensing of new grow facilities due to an overproduction of cannabis and a decrease in prices on the wholesale market.
Oregon, who has 2,855 total marijuana licensees consisting of 1,407 producers and 826 retailers, passed legislation to attempt to deal with the overproduction of cannabis within its borders. The recent legislation prohibited the approval of processor, grower, and retailer licenses submitted after January 1, 2022 until March 31, 2024.
Michigan is also suffering from the overproduction of cannabis with prices of wholesale recreational marijuana falling at a rapid rate. Prices of wholesale marijuana have fallen as low, or lower, than those in states that have had adult-use marijuana establishments for much longer. According to the Cannabis Regulatory Agency (CRA), the average retail price for an ounce of marijuana is about $110 which is a 73% decline in price from the $393 per ounce that marijuana cost in September 2020.
The decline in the price of cannabis is attributable to fact that the number of licensed growers far outnumber the number of licensed retailers. Between July 2021 and July 2022, the number of active grower licenses increased by 65%, meanwhile, the number of active retail licenses increased by only 34% in that time. According to the most recent monthly report published by the CRA for the month of September, there are 747 medical grow licenses and 418 medical retail licenses currently active and 795 adult-use grow licenses (excluding excess grower licenses) and 569 adult-use retail licenses that are currently active.
As a result, lobbyists for some of Michigan’s largest marijuana companies have started to push state lawmakers to enact a moratorium that would bar the CRA from approving any new cultivation licenses. In order for that to happen though, three-fourths of Michigan legislators would have to vote for the moratorium.
Chelsea Lenard is an associate attorney at Grewal Law PLLC. Her practice focuses primarily on personal injury, cannabis law, family law, criminal law, and employment law.
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