Now well into its second full year of adult-use sales, Michigan’s legal cannabis market is emerging from the pandemic ripe with opportunity.
Michigan regulators allowed the state’s dispensaries to continue operating during the COVID-19 pandemic in 2020 – the first full calendar year of adult-use sales— resulting in sales over $984 million.
But sales have not only rebounded; they have also soared to record levels: March 2021’s adult-use sales of $97 million shattered the previous record of $67.4 million set in January 2021.
Through April 2021, combined sales of medical and recreational cannabis were $513 million—more than double that period in 2020.
Despite the vast opportunity the market offers, unique barriers have stopped even some of the largest MSOs from entering the Michigan market.
Statewide, there are no caps on the number of cannabis licenses issued, and the fees are set at $6,000 regardless of license type.
But Michigan’s 1,764 municipalities decide at the local level whether they will allow commercial cannabis activity, which activities they will permit, and how many licenses they will grant.
Through December 2020, 80 percent of California communities had opted out of recreational retail sales while 32 percent of Massachusetts towns and cities had banned all adult-use operations as of May 2021.
For companies targeting the Michigan market, regtech products can monitor municipality dockets watching for cannabis hearings and ordinances to ensure licensing opportunities are not missed.
Companies targeting a municipality that has not yet opted in should consider hiring on-the-ground support to pitch local officials and residents about the many positives legal cannabis can bring.
With medical cannabis sales legal since 2008, Michigan’s avid patient base boasted more than 250,000 medical card-holders when recreational sales began.
But historic acceptance of cannabis and normalized consumption means Michigan consumers are more sophisticated than consumers in other states.
This is part of the reason some MSOs have struggled or haven’t entered the Michigan market: They simply cannot compete with existing cultivators on product quality.
It will not come easy: Companies wanting to enter Michigan’s lucrative market must be prepared to engage local communities and ensure their products meet the quality and variety expectations of experienced consumers.