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MICHIGAN CONSIDERS CANNABIS OVERHAUL WITH TOUGHER PENALTIES AND LICENSE LIMITS

By Azure Kwok. Published on October 31st, 2025.

LANSING — Michigan lawmakers are considering two bill packages that would tighten enforcement tools, revise criminal penalty tiers, and limit the issuance of certain cannabis licenses — a debate unfolding separately from the recently passed 24% wholesale tax.

House package heard Oct. 23

The House Regulatory Reform Committee on Oct. 23 took testimony — but no vote — on 4 bills:

  • HB 5104 would allow the Cannabis Regulatory Agency (CRA) to continue disciplinary actions even after a licensee’s authorization expires if proceedings were already underway.
  • HB 5106 would add explicit summary-suspension powers to the adult-use law (MRTMA), enabling CRA to suspend a license when conduct threatens health, safety, or welfare — with examples such as obstructing investigations or failing to provide records laid out in the analysis and introduced text.
  • HB 5105 is tie-barred to HB 5107 (which modifies allowable personal possession/cultivation); 5105 cannot take effect unless 5107 also becomes law. HB 5105 revises penalties for manufacture/delivery or possession with intent, aligning tiers across plant count, weight, and concentrate (resin). Proposed tiers:
    • 10–25 kg (or 50–100 plants, or 1–2.5 kg concentrate): misdemeanor, up to 1 year and/or $20,000.
    • 25–125 kg (or 100–500 plants, or 2.5–12.5 kg concentrate): felony, up to 2 years and/or $500,000.
    • 125–250 kg (or 500–1,000 plants, or 12.5–25 kg concentrate): felony, up to 4 years and/or $2,000,000.
    • ≥250 kg (or ≥1,000 plants, or ≥25 kg concentrate): felony, up to 10 years and/or $10,000,000.

In committee testimony reported by Michigan Advance, a CRA legislative aide pointed to two persistent problems the package aims to address: large illicit grow operations and the agency’s current difficulty pursuing actors whose licenses have expired. This bill package is designed to close these gaps. Rep. Emily Dievendorf raised concerns during the hearing about stepping up enforcement and penalties at the same time the new 24% tax could push consumers to the illicit market.

Rolling joints with trimmed cannabis

Senate package would limit new market entries

SB 597 & SB 598 would reshape market entry by (1) capping retailer density at one per 10,000 residents per municipality starting Jan. 1, 2026, and (2) ending the issuance of new Class B (500 plants) and Class C (2,000 plants, stackable) grower licenses going forward.

Early reaction has included concern from retailers and local observers that a hard cap on stores could disadvantage small businesses and reduce access, especially in smaller municipalities. Supporters of the bill package point to oversupply pressures and price declines as context for limiting new capacity and managing retailer density.

What’s next?

For now, the House package have no committee vote to report, and the Senate package remains under consideration following its mid-October introduction. Both packages remain subject to amendment and substitutes in committee. Watch for updated fiscal notes, refined triggers for summary suspension, and clarifications to effective dates or density calculations as the House and Senate consider possible changes.

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