LANSING, MI -- While the lines are shorter and the sales slightly less, Michigan’s recreational marijuana business remained brisk through its second week of existence.
In two weeks, the handful of licensed, actively selling retail locations have tallied $3.1 million in sales, the state Marijuana Regulatory Agency reports.
During the opening week of licensed recreational marijuana activity, predominantly at three Ann Arbor businesses between Dec. 1 and Dec. 8, there were $1.6 million in sales. Between Dec. 9 and Dec. 15, a week that kicked off with five recreational stores, shoppers made about $1.4 million in purchases.
The state has generated $515,051 in taxes, 6% sales and 10% excise.
The first $20 million in tax revenue for the first two years of recreational sales is slated to be spent on research for marijuana use in medicine. The breakdown of the remainder is: 15% to cities, townships or villages and 15% to counties that have allowed recreational business; 35% to public schools and 35% to roads and infrastructure.
Nearly 1,400 of Michigan’s 1,773 cities, townships and villages are not allowing recreational marijuana business in their communities.
State budget officials are projecting recreational marijuana to become a $1.5 billion-per-year industry by late 2021.
As of Dec. 17, the state had issued 16 retail licenses, four more than the dozen “or so” Marijuana Regulatory Agency Director Andrew Brisbo previously projected by 2020.
However, the majority of those businesses have not opened their doors to recreational customers because of delays in prepping or acquiring recreational product to stock their shelves.
Through Dec. 6, 2021, in accordance with the 2018 voter-passed recreational marijuana law, the only businesses allowed to obtain recreational licenses from the state are those already licensed under the separate medical marijuana licensing laws.
When recreational sales went live on Dec. 1, the state allowed marijuana grown and licensed under the medical program to be transferred to the recreational side.
It requires any products previously for sale in medical dispensaries to have been in inventory for 30 days or more before being transferred for recreational sales.
While the surprise move by the Marijuana Regulatory Agency pleased many, especially the droves of customers eager to purchase licensed marijuana from a store, some industry insiders fear it was premature and could exacerbate a marijuana shortage.
“We have such a shortage of product right now - our state is already at risk of running out of cannabis completely due to the early rec sales," Michigan Cannabis Industry Association Executive Director Robin Schneider said during on WKAR’s Off the Record last week. “We might be sending patients back to the illicit market before this is over.”
Several businesses told MLive they need to beef up inventory before opening their doors in order to avoid quickly selling out of stock.
“I’m not sure when I’m going to go live,” Tarek Jawad, the owner of Herbology Cannabis Co. in Wayne County’s River Rouge, told MLive hours after paying for his retail license Tuesday. He said there’s not enough supply of recreational marijuana flower for sale, so he plans to place large orders for medical marijuana that he can transfer for recreational sale after 30 days.
Much of the new recreational marijuana product comes from growers and processors under the same ownership as other active retail shops -- Jawad’s competitors.
Three companies hold all of the growing licenses issued so far. The state granted 10 class C grower licenses that can be bundled or “stacked” to increase total growing capacity. Each license allows for 1,500 marijuana plants.
Exclusive Brands, which operates a retail store in Ann Arbor, is licensed to grow 1,500 marijuana plants; Lume Cannabis Co. opened Lit Provisioning Centers in Evart and is licensed to grow 6,000 plants and Green Peak Innovations, which owns a Skymint in Ann Arbor, is licensed to grow 7,500 plants.
The state has licensed three processing businesses that are allowed to convert harvested marijuana to retail product. Those processors, Exclusive Brands, Arbors Wellness and Green Peak Innovations, all operate their own retail stores.
Jawad said the lack of growers and processors not already affiliated retail stores makes it “very tough” for businesses like his own to obtain recreational product.
The state has also licensed one testing lab, three recreational marijuana transportation companies and an event coordinator.
The below map shows licensed retail locations and applicants in the process of obtaining a retail license.
-- Gus Burns is the marijuana beat reporter for MLive. Contact him with questions, tips or comments at fburns@mlive.com or follow him on Twitter, @GusBurns. Read more from MLive about medical and recreational marijuana.
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