Thirty-seven companies have failed to get their state-issued cannabis operator licenses renewed to date this year. Reasons include being more than a year late on paying state or federal taxes; failing to pay the licensing renewal fees, which can be as high as $24,000 per license; and disciplinary reasons, according to a list obtained by Crain’s from the Michigan Cannabis Regulatory Agency through a Freedom of Information Act request.
The loss of licenses shows just how dire the financial situation is for many operators in the state, with prices plunging more than 65% since March 2023. The average price of an ounce of cannabis flower was $62.91 in June, among the lowest in the country.
“I’m seeing a number of stores shutting down over the last couple of months,” said Ben Sobczak, partner and cannabis attorney at Detroit-based Dickinson Wright. “Everyone is late on their taxes. Many owe more in excise taxes than is justifiable to operate the business. They wonder, ‘I have to pay $650,000 just for the pleasure of running this store at a loss for another year?’”
Of the licenses not renewed, 15 were due to owing at least a year’s worth of back taxes.
Primitiv Cannabis, the company owned by former Detroit Lions star Calvin Johnson and former Lions offensive lineman Rob Sims, failed to get its grower and processor license renewed for its Webberville facility and its single retail license renewed for its dispensary in Niles. The company was delinquent on taxes on all three licenses for at least a year, according to the CRA. All three of its recreational cannabis licenses expired on July 15.
Read more at Crain‘s Detroit
