The cannabis industry in Michigan has witnessed significant growth in recent years, with numerous retailers and suppliers shaping the market landscape. However, an emerging concern that demands attention is the lack of regulatory oversight on payment terms between retailers and suppliers. Instances of retailers abusing payment agreements to the detriment of suppliers have been reported, highlighting the need for clear rules and guidelines to ensure equitable and sustainable business practices.

Key Points:

1. Promoting Fairness and Transparency: Establishing rules around payment terms will help promote fairness and transparency in transactions within the cannabis industry. Clear guidelines can prevent abuse of bargaining power by retailers and protect the interests of suppliers, leading to a more balanced and ethical marketplace.
2. Mitigating Industry Risks: Unclear or unregulated payment terms pose risks to the financial stability of suppliers, potentially leading to disruptions in the supply chain and impeding market growth. By enacting rules that govern payment agreements, lawmakers and regulators can mitigate these risks and foster a more stable and secure industry environment.
3. Supporting Business Sustainability: Fair payment practices are essential for the long-term sustainability of businesses in the cannabis industry. Regulations that address payment terms can help maintain healthy business relationships, enhance trust between stakeholders, and contribute to the overall prosperity of the market.

To address these issues, the MCMSC will promote payment and credit policies that provide enforceable mechanisms to hold a business accountable for violating payment terms or engaging in unethical business practices. These proven policies have worked for years in the alcohol industry and are beginning to be applied to legal marijuana markets in other states and in Canada. The MCMSC believes that Michigan should enact similar policies to ensure businesses receive payment for products or services in a fair and timely manner and to create the necessary regulatory guardrails against businesses that are habitually delinquent.

Code of Conduct

MCMSC members pledge to conduct business as follows, to the best of their ability:

• Products distributed and sold in Michigan will be cultivated and manufactured in Michigan.
• Compliance with Michigan marijuana laws, rules and regulations will be pursued at the highest levels.
• All applicable taxes, fines, fees and invoices will be paid in a timely manner based on the agreed upon terms.
• Significant investments will be made in our licensed facilities, in our employees, and in our communities.
• Personal or company attacks will not be tolerated, and our only focus will be on the education and advocacy of policy ideas to improve the Michigan market for all.
• Policy ideas will be limited to the laws, rules and regulations that directly impact the legal, commercial market. No positions will be taken on caregivers, patients or home grows.