Businesspeople know that markets and the world never stop changing. Now, lawmakers in Lansing have a golden opportunity to show they can react in a timely fashion to a big change.
We’re talking, of course, about medical cannabis.
Bills have been introduced to virtually eliminate the distinction between medical marijuana and its recreational cousin. The two markets, created by separate laws, would be merged into a single licensing scheme under legislation sponsored by State Reps. Graham Filler, R-St. Johns, and Jimmie Wilson Jr., D-Ypsilanti.
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It’s a move that just makes sense on its face for an industry that now eclipses liquor in sales in Michigan — offering regulatory simplification and fewer headaches for businesses, without really sacrificing anything.
It’s also a welcome nod to reality.
What’s known in the business as “adult-use” cannabis – the kind you don’t need a doctor’s permission to buy – has now thoroughly taken over the Michigan weed market. Cannabis sold through “medical” channels accounted for just 0.7% percent of Michigan weed sales through June of this year.
(Lesson: Convenience and accessibility always win in a retail business.)
Medical marijuana was always a bit of a charade anyway — it’s not like it was difficult to find doctors willing to sign off on medical cards after voters approved medical marijuana in 2008, 10 years before recreational use was legalized.
The proposed changes would maintain benefits for people who have those cards – they’d be exempt from the 10% excise tax on cannabis, just like they are now when going through medical dispensaries.
Regulatory burdens on cannabis businesses would be lifted, and the retailers who maintained both medical and recreational licenses will be able to take that down to one license and one set of approvals and paperwork.
Many customers haven’t maintained their medical cards even though they get those tax benefits — the number of card holders has declined by more than half in just two years — from 225,120 in May 2022 to just 101,160 as of May 30 this year. So there’s little risk that the state and local governments will lose much of the tax revenue they get now.
You need look no further than to the market for alcohol to see why multiple sets of regulations can skew a market.
Distilled liquor has been sold under a different set of rules from beer and wine in Michigan since Prohibition ended, resulting in a market that limits competition in different ways and helps entrenched interests protect their turf using the government as a foil. That prompts massive battles over any little change in the laws.
The parallel to weed isn’t perfect — medical cannabis was disappearing on its own — but the history of liquor regulation does highlight the risks of unintended consequences.
Changing the law, however, requires a challenging vote in the Legislature — a three-quarters vote would be required to change the state’s cannabis law. But we’d urge lawmakers from both sides to move quickly to make the change, and both can tout it as a win for simplified government that responds to a changing world.
