Your Company Might Already Be on a Public "Doesn't Pay" List

On Monday, August 10, Higher Love Cannabis Co. closed five of its nine Michigan stores, effective immediately. All five were in the Upper Peninsula. The company pointed at the state's new 24% wholesale excise tax, which took effect January 1 and stacks on top of the existing 10% point-of-sale excise and 6% sales tax, and said the added burden "has further strained the supply chain and made it increasingly difficult for responsible operators to remain viable."

Somewhere in Michigan this month, a brand rep is looking at open invoices for product sitting on shelves behind locked doors.

That is the part of a closure that doesn't make the trade press. Michigan's numbers are easy to find: H1 recreational sales of $1.48B, down 5.3% year over year; 845 licensed retailers in June 2025 down to 836 a year later; $34M in tax collected through April 30 against a $105M projection. What's harder to see is where the unpaid invoices go when a store shuts. They don't go anywhere. The receivable becomes a loss the day the doors lock, and nobody calls the vendor to tell them it happened.

Where Trade Creditors Actually Sit

TerrAscend's Michigan operations went into court-ordered receivership this summer with vendor lawsuits pending. The filing puts roughly $210M with its lender, FocusGrowth, and roughly $6.8M in Michigan payables against $5.2M in assets.

The secured lender is first in line. The brands and distributors who shipped product on net-30 are last, chasing $6.8M out of a $5.2M pot. That ratio is what an unmanaged receivable is actually worth on the day a customer fails.

Michigan is not a special case. The same thing happened in Colorado, where Native Roots sold all 15 of its dispensaries at the end of July and cut 141 jobs at its Denver manufacturing plant, in a state where sales have fallen from a $2.2B peak to $1.3B. It happened in California, where two Santa Rosa manufacturers filed WARN notices in July and one CEO described a company "sized to a scale of industry that didn't materialize." Each of those left behind a stack of invoices that no collections process was going to fix.

Vendors Stopped Waiting for Regulators

This is why cannabis has built its own credit bureaus, and there are now two of them working in different directions.

The Cannabiz Credit Association, founded by Brett Gelfand after watching $500,000 walk out the door as a Colorado CEO in 2015, relaunched as CCA 2.0 in April with license verification, real-time collections intelligence, automatic risk flagging and a Best Payers Index by state. It has around 220 members, more than 75% of the largest MSOs among them, and has catalogued $2.6B in reported AR data. It is member based, and you have to join to see inside it.

Cannabis Credit Scores works the other way. It is public and searchable by anyone. Vendors submit reports on their customers, operators get scored, and anything below 20 lands on a list that requires no membership to read. More than 100 California operators are on it now, concentrated in Los Angeles, Riverside, Sacramento and Alameda counties. High Times covered it in May and called it what it is: the vendor's version of a credit bureau. Aggregators republish excerpts on a recurring basis, which means the entries also travel to sites the operator has never heard of.

Neither was built to punish anyone. They exist because 56% of cannabis invoices are past due, 23.2% are past 90 days, and $60M went to collections last year. On the most recent industry estimate, 57.3% of operators told Whitney Economics that unpaid receivables hurt their business more than 280E does. Everyone in cannabis can talk about 280E. Very few operators can tell you their own DSO without opening a file.

Nobody Stretched a Vendor Because They Wanted To

Almost everyone reading this is on both sides of the invoice. The operator furious about a dispensary sitting on $40,000 is, that same week, stretching a packaging supplier to 75 days.

That's not hypocrisy, it's arithmetic. A state tax lands mid-quarter. A customer stretches you first. 280E eats the cash that was supposed to cover the invoice. The alternative to paying late was missing payroll. Late payment in cannabis is usually a symptom, and most of the time the symptom is somebody else's problem arriving on your books.

What changed is that the reason no longer travels with the record. A score on a public list has no footnote explaining that Michigan added a 24% wholesale tax on January 1. It is a number next to your company name, and it does not expire.

The Objection Is a Real One

A public list with a secret methodology deserves scrutiny. Cannabis Credit Scores says its scores are "based on feedback provided directly to this site from the cannabis community as well as third party indicators" and that it won't share the exact process, to prevent gaming. Its about page names no owner and no leadership. There is no visible appeals process. Some entries are stale enough to be misleading: at least one scored company has been defunct since 2024.

Those objections killed the government version. California's AB-766 in 2023 and AB-2888 in 2024 would have mandated payment terms, and AB-766 drew opposition because it could have triggered license discipline against an alleged debtor without a hearing. Massachusetts regulators opened an accounts receivable inquiry in June 2024, reviewed five states' approaches, and never issued a rule. New York went furthest with mandatory delinquent payment reporting and a C.O.D. list that cuts 30-day-late operators off from credit terms statewide, and even that is contested; a court granted a preliminary injunction blocking OCM directives affecting roughly 150 businesses.

The due process concerns are legitimate. They also don't help you. In New York, being late is a regulated status with a cure path. In California, it's a search result maintained by people who won't explain how they arrived at it. There is no appeal available, which leaves one remedy: not qualifying for the list in the first place.

What a Credit Function Looks Like in a Company That Never Had One

None of this requires a credit department. It requires treating terms as a finance decision instead of a sales one.

Start with a credit application, because most operators extend credit by handshake and find out where the limit was when the account defaults. Write down a limit per account and set terms against risk rather than against the size of the order in front of you. Then separate who sells from who collects. Today it's usually the same person, which is why terms get promised in the field and nobody chases the invoice afterward. The rep keeps the relationship. Someone else owns the calendar.

Write the hold policy before you need it. A hold triggered by aging and applied to every account is a process, and a hold invented in the middle of an argument is a grudge. The second one is what costs you the account.

Watch payment behavior, not just balances. A customer sliding from 30 to 45 to 60 days is telling you something months before a receivership filing does, and the balance can look unremarkable the whole time they slide. That signal only surfaces if someone reads the aging trend weekly. Waiting for month-end close means finding out two weeks and several shipments late.

And call your suppliers before they call you, which is the half of this that never makes it onto a checklist. Tell them what you can pay and when. An operator who communicates through a bad quarter keeps the supply relationship and keeps the score. The one who goes quiet teaches their vendors the same lesson their own customers taught them.

Most operators have never once checked whether their company appears on any of these lists. It takes five minutes, and it is the cheapest risk audit in the business.