Court ruling deals blow to Michigan’s illicit cannabis market

The Michigan Court of Appeals has effectively closed a significant loophole in the state's cannabis laws with its ruling in *People v. Julia Soto*.

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This decision allows prosecutors to pursue felony charges against individuals caught possessing and distributing large quantities of marijuana without a state-issued license, a marked shift from the court's previous interpretation.

In the *Soto* case, the defendant had been found with around 20 pounds of marijuana and $10,000 in cash, leading to felony charges. However, Soto’s defense argued that under the 2018 Michigan Regulation and Taxation of Marihuana Act (MRTMA), felony charges were prohibited, citing a previous court ruling in *People v. Shaaln Kejbou*. In that earlier case, the court ruled that growing or distributing marijuana without a license could only result in misdemeanor charges, even for large-scale illicit operations.

This leniency had caused problems in Michigan’s cannabis industry, contributing to a surge in illegal operations and unsafe cannabis entering the market. Law enforcement struggled to crack down on large-scale illegal growing and distribution, as they were limited to pursuing misdemeanor charges. The *Soto* ruling corrects this by reaffirming the intent of the MRTMA to prevent the diversion of cannabis into illegal markets and restore felony penalties for large-scale unlicensed activity.

The decision could help stabilize Michigan’s cannabis industry by reducing illegal competition, potentially alleviating the oversupply that has caused wholesale cannabis prices to plummet. The *Soto* case may now be a precedent for pursuing felony charges against large-scale illegal cannabis operations in the state.