Michigan officials have shuttered 40 medical marijuana businesses that were operating without valid licenses and they're expected to warn hundreds of others that they could be next.
The state Department of Licensing and Regulatory Affairs started the process of closing down facilities Thursday, the Detroit Free Press reported .
"Any business that didn't apply for a license by Feb. 15 isn't in compliance with the emergency rules that were set up," said David Harns, spokesman for the department.
The emergency rules allow businesses that have applied for a state operating license to temporarily operate under certain conditions.
Hundreds more businesses are expected to receive cease and desist letters in the coming days. Authorities didn't confiscate products when delivering the letters, Harns said.
The letter said those who refuse to shut down risk being unable to receive a license in the future and could face penalties or sanctions.
Michigan voters passed a medical marijuana law in 2008, which allowed caregivers to grow a small amount of the plant for patients with medical marijuana cards. More than 277,000 people have medical marijuana cards in Michigan.
The Legislature passed bills in 2016 to regulate and tax medical marijuana.
The state began accepting license applications in December and is running background checks on business owners. The Medical Marijuana Licensing Board will meet next week to consider more applications, but licenses likely won't be given out until April.
Licenses fall into five categories: growers, processors, testing facilities, secure transporters and dispensaries. More than 370 businesses have pre-qualified for a license and need to get approval from a local community. Nearly 120 other applications have been submitted with approval from a local community.
The industry is expected to have annual revenue of more than $700 million, a figure that could increase dramatically if the state legalizes adult recreational marijuana.
