The Michigan Marijuana Laws, as of the end of 2017, are not based on the will of the voters of Michigan. This is because the state constitution requires a ballot initiative or a constitutional amendment to make changes to the state marijuana laws. However, Michigan law does allow for two cases of the Michigan Medical Marijuana Act (MMMA) to be passed as constitutional amendments, which automatically makes them laws.
Michigan has had a tumultuous time in the medical cannabis industry. The state’s medical marijuana program has faced a number of hurdles. Chances are you either have heard of some of them or you have heard of all of them.
Despite hurdles, the Michigan Cannabis market is on fire.
Michigan’s legal cannabis market, now in its second year of selling adult-use cannabis, is rich with opportunity. Michigan ranks second behind California and Colorado in revenue growth beginning in 2021, meaning the state could not only exceed, but surpass, the $1 billion revenue threshold.
Michigan regulators allowed pharmacies in the state to continue operations during the 2020 COVID 19 pandemic – the first full calendar year of adult sales – resulting in sales of more than $984 million. Despite high commercial certainty and strong initial sales, purchases of legal cannabis declined during the autumn months.
But sales have not only increased, they have reached record levels: Adult sales reached $97 million in March 2021, breaking the previous record of $67.4 million in January 2021. And April surpassed March by more than $7 million, for a total of more than $105 million.
By April 2021, combined sales of medicinal and recreational cannabis will reach $513 million, more than double those of 2020. If sales continue to trend in the same direction, cumulative annual sales in the state could exceed $1.5 billion this year, a 56 percent increase from 2020.
Despite the tremendous opportunities in this market, unique barriers have kept even some of the largest MSOs from entering the Michigan market. Local consent and the state’s well-informed cannabis consumers are two barriers to consider when evaluating cannabis development opportunities in the Wolverine State.
Community clearance is a problem
Unlimited cannabis licenses may be issued throughout the state and the fee is set at $6,000, regardless of the type of license. Unlimited licenses and reasonable fees lower barriers to entry at the state level.
However, Michigan’s 1,764 municipalities decide at the local level whether to allow commercial cannabis activities, what types of activities to allow, and how many permits to issue. For example, a municipality may accept cultivation and processing but not retail. By April 2021, only 101 municipalities had introduced cannabis for adult use. This represents less than 6% of all communities.
California and Massachusetts have taken a similar approach to approving adult licenses on a city-by-city basis. By December 2020, 80 percent of California municipalities will have eliminated retail sales of recreational drugs, and by May 2021, 32 percent of Massachusetts cities and towns will have banned all adult drug stores. Compared to these more mature states, Michigan municipalities have left more options on the table, which may prompt them to make changes in the future.
For businesses targeting the Michigan market, Regtech’s products help keep track of municipal documents and cannabis hearings and ordinances so they don’t miss out on licensing opportunities. It is also worth listening and waiting to see how this process goes in other regions, which will provide valuable experience to see how colleagues also navigate the system.
The positive side of local advocacy is that the communities that have already decided to participate in the program are aware of the economic and social benefits of legal cannabis. For communities that still have doubts, education and advocacy can help allay fears. Businesses targeting a community not yet participating in the program should consider enlisting local support to educate local officials and residents about the many positive aspects legal cannabis can bring.
The benefits of allowing legal cannabis at the local level are not only job creation and tax revenue, which is highly valued in a post-pandemic economy, but also cleaning up the illegal market.
More demanding consumers
With medicinal cannabis sales legal since 2008, Michigan had more than 250,000 medicinal cardholders when recreational sales began. This has created a platform for the sale of adult medicines and has been a major factor in the accelerated growth of the market.
Michigan’s long history of cannabis legalization has led to cannabis use becoming normal and accepted. Currently, more than 70% of the state’s residents are 21 or older, representing 7.3 million potential consumers.
However, the historical acceptance and normalization of cannabis means that consumers in Michigan are more sophisticated than those in other states. They have discerning tastes, which means companies must offer top-quality floral and infusion products to be competitive. In addition to the quality of the products, discerning Michigan consumers respond to the variety of new flavors and varieties.
This is one of the reasons why some MSOs are struggling or not entering the Michigan market: They simply cannot compete with existing manufacturers in terms of product quality. The level allowed by consumers in other markets is much lower than what is acceptable in Michigan, especially when compared to markets with few licensed producers and limited competition.
Not easy, but worthwhile
With a willing consumer base, sales projections in the billions, and much of the state open to commercial development, Michigan presents a significant opportunity for legal cannabis. It won’t be easy: Companies looking to enter Michigan’s lucrative market must be willing to work with local communities and ensure that their products meet the expectations of experienced consumers for quality and variety. But for companies willing to overcome these hurdles, as the market matures, it offers tremendous potential.Despite the hurdles that have been placed in front of the rise of the Michigan Cannabis Market, the state continues to see a steady rise in both recreational and medical cannabis use and the demand for cannabis goods is only growing. Following a slow start, the recreational market has begun to pick up, as the state has come into compliance with state laws regarding legal use of the plant. So far, the market has proven to be resilient to challenges, and the industry has not been held back by a lack of demand or selection.. Read more about michigan micro grow license 2020 and let us know what you think.
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