This is a plan doomed for failure that will keep organized crime in the cannabis industry. First, the quality of product from LPs does not measure up to that produced by the cottage industry. Clients will know this and opt to get their cannabis from cottage growers.  Second, even the government of the day back in the prohibition era understood thy could not control the manufacture of booze, which is why they set out standards then allowed private enterprise to handle production. 
Third, the issue of disease. Large LPs will spread bugs far and wide, whereas cottage grower infestations are isolate to the growers immediate clientele.
All this will do is keep the black market thriving. Totally wrong headed plan.