This story was reprinted with permission from Crain’s Detroit.
Legislation for Michigan’s long-awaited marijuana reference testing lab fell victim to the chaotic and relatively unproductive lame-duck session in Lansing.
House Bill 5529, which passed unanimously out of committee early last year, didn’t make it to a full vote in the House during the final sessions in December, temporarily shelving legislation that would allow the lab to operate to its fullest capacity until the next legislative session begins later this month.
The lab, which has already been allocated $4.4 million in state funding to build and open in the coming months, requires a legislative change to the Michigan Regulation and Taxation of Marihuana Act for regulators to be able to buy and transport marijuana for testing themselves.
Under the current system, state regulators contract private labs to pick up, transport and test marijuana at private labs from cultivators and processors from across the state. But regulators believe illicit marijuana and banned chemicals are still entering the regulated market between testing and distribution to dispensaries.
So the state-run lab is designed for regulators to acquire consumer-ready marijuana products off dispensary shelves for testing, ensuring the product sold on retail shelves is free of banned pesticides — and to confirm whether the product matches the label — in regulators’ battle against illicit marijuana infiltrating the market and artificially depressing prices.
But because marijuana is still illegal federally, regulators want laws on the books to allow them legal cover to purchase and transport product instead of operating in the legal gray area that the practice exists in now.
Changing MRTMA, however, is a tough lift. Because the law stems from a voter ballot initiative, any change to the law requires an affirmative vote from three-quarters of the state legislature.
With HB 5529 missing out on a vote during the last legislative session, the CRA needs to find new bill sponsors and rally new support from Republicans to pass the bill. Rep. Tyrone Carter, D-Detroit, is the bill’s primary sponsor.
The CRA remains confident it can get the bill across the finish line.
“We continue to move forward with procurement, construction, and establishing SOPs (standard operating procedures) so that we’re able to full utilize the lab and better protect consumers as soon as possible,” David Harns, public relations for the CRA, told Crain’s in a written statement.
If the lab is effective at discovering illicit product, giving the Attorney General’s Office more concrete evidence to prosecute, the hope is that it could stymie the illicit marijuana in the system and stabilize plummeting prices across the industry.
The state has effectively accused dozens of companies of using illicit product, or at least accused them of being unable to identify where the marijuana originated.
The state’s legal market is being squeezed by product oversupply. Prices for adult-use marijuana prices dropped another 3% in November to $71.80 for an ounce of flower, down nearly 23% from the start of the year, according to data from the CRA.
That’s the all-time record-low price since the state legalized recreational marijuana in 2018.
The price slide has made it all but impossible for several growers in the state to turn a profit: prices have fallen 87% since legalization in 2018.
Chicago-based PharmaCann told employees earlier this month it would shutter its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying off 222 by the end of January. And Fluresh LLC, doing business as Tend.Harvest.Cultivate. announced in November it was closing down its $46 million, 105,000-square-foot grow facility in Adrian.
It’s unclear to what degree the state’s new lab will impact pricing.
[[{“value”:”The lab has already been allocated $4.4 million in state funding.
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