State Audit Finds Michigan’s Marijuana Regulators Are Falling Behind On Disciplinary Action For Business Violations

The audit found CRA didn’t complete disciplinary action for “555 formal complaints with violations that, as of September 30, 2022, had been open an average of 529 days.”

By Scott McClallen, The Center Square

An audit marked Michigan’s Cannabis Regulatory Agency (CRA) with one “material condition”—the most severe ranking.

The CRA administers the state’s cannabis programs, including licensing, inspection, investigation and enforcement for growing, processing, testing and selling cannabis.

The Office of the Auditor General found the CRA “averaged 196 days and took up to 757 days to complete disciplinary action for 123 formal complaints involving licensee violations.”

The audit found CRA didn’t complete disciplinary action for “555 formal complaints with violations that, as of September 30, 2022, had been open an average of 529 days.”

The audit said CRA needs to “improve its processes to ensure timely disciplinary action against licensees for identified violations. Timely action helps CRA mitigate potential risks to Michigan’s cannabis consumers and reduce future licensee violations.”

As of September 2022, the CRA reported 1,353 medical and 1,781 adult-use licensed marijuana facilities, 195,776 active registered patients and 21,698 active caregivers.

Released: 8/24/2023 Performance Audit: Cannabis Regulatory Agency, Department of Licensing and Regulatory Affairs Link: https://t.co/i1InFHJ6wH#MIAUDGEN#AUDIT#Independent#Objective#Transparentpic.twitter.com/HbIpLyjzKA

— MI AUDGEN (@MIAUDGEN) August 24, 2023

In fiscal year 2022, the CRA collected $40.6 million of revenue and spent $23.2 million. The agency has 139 employees as of late 2022.

The audit found the Licensing and Regulatory Affairs and/or CRA didn’t obtain signed security agreements for 50 percent and 88 percent of the users it reviewed for its IT systems. Also, either or both of the agencies didn’t disable access for 19 percent and 3 percent of user accounts that hadn’t been used within 60 days.

However, the audit found CRA completed timely investigation for 91 percent of complaints reviewed, and the agency placed holds on failed products, investigated and ensured licensees either remediated or destroyed products for 100 percent of failed banned pesticides tested.

Within 30 days of receipt, the Office of Internal Audit Services, State Budget Office must review the plan and either accept it or take more steps to finalize the plan.

Between 2019 and 2022, Michigan collected about $271 million in legal, adult-use marijuana tax revenue, according to a report from the Marijuana Policy Project that analyzed tax revenue in states with adult-use cannabis since 2014.

This story was first published by The Center Square.

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Photo courtesy of Chris Wallis // Side Pocket Images.