To hear Michael Elias speak about his roots, his lifelong friendships with his Michigan Pure Med co-founders and his long-term plans for the company’s retail brand, Common Citizen, it’s clear his goal is not just to create a large, successful cannabis company, but to create a large, successful cannabis company in Michigan.
With adult-use sales on the distant horizon, Michigan Pure Med is already poised to become a dominant player in the state’s evolving cannabis industry. The company has secured 45 total licenses, including nine retail licenses, and it’s in the process of building out a 200,000-square-foot hybrid greenhouse in Marshall, about a hundred miles west of Detroit. The 70-acre site gives the company the capacity to scale up to 1.2 million square feet of cultivation.
“For us, it’s not about being the biggest and baddest,” says Elias, the company’s CEO. “It’s about having the economies of scale.”
In May, the first Common Citizen dispensary opened in Flint, a city forever linked to the rise and fall of the American automobile industry and now besieged by an ongoing water crisis that has further dampened spirits in the former industrial mecca. With only a handful of Michigan municipalities currently willing to allow commercial cannabis businesses, Flint has welcomed the burgeoning industry.
And despite the city’s economic hardships, Elias sees Flint as the perfect launching pad for the new brand. Cannabis has the potential to bring jobs to the area, and Flint fits right into Michigan Pure Med’s mission of hiring people who are passionate about their communities.
“We feel the renaissance of Flint parallels the renaissance of cannabis very well,” Elias says. “If you’re a resident of Michigan, there’s a soft spot in everyone’s heart for Flint.”
Common Citizen staff members have already started giving back to the surrounding area, launching a “Wednesday Water Drive” initiative to help patients avoid long lines for clean drinking water — a plan supported by the company’s executives, but spearheaded by its frontline employees, Elias says.
“For us, the more you can create a mission for your staff, the more likely they are to feel like they’re part of a movement,” Elias says. “That comes across in the emotional connection with the customer when they come in.”
With more than two decades of experience in health care, it’s not surprising that Elias would take a patients-first approach to the cannabis industry, even as Michigan marches toward the official opening of its recreational program.
“I feel like everything I’ve done in the last 21 years has really prepared me to drive that strategic framework in the cannabis space,” Elias says.
Elias views the cannabis industry not just as a health care professional, but as an engineer — a common bond he shares with co-founders David Yostos and Joseph Jarvis, beyond all growing up together in the Detroit area.
While most retail stores group products by category, Common Citizen uses a “need-based” layout, Elias says. Rather than having all vape pens in the same area of the dispensary, for example, products are sorted by intended effects. Each product is color-coded and categorized by a descriptive tagline — Unplug, Sweet Relief, Time to Shine and Daily Dose.
“It’s a bit of a nightmare from an inventory standpoint,” Elias admits, but says he believes it serves the patients better. The company also downplays traditional strain names to connect better with new consumers who may be entirely unaware of cannabis culture lingo.
“We’re in the business for the 88% of the population that doesn’t consume,” Elias says.
Like most upscale dispensaries — or provisioning centers, as they’re known, according to Michigan regulations — Common Citizen has a drawn a number of over-the-top comparisons to famous retail brands, such as the Apple Store of Cannabis or the Shinola of Cannabis, referencing the Detroit-based luxury goods brand that took its name from a shoe polish manufacturer. Elias even heard somebody once call Common Citizen the Louis Vuitton of Cannabis. While he appreciates the sentiment, he’s quick to dispel that notion.
“I think that’s a little too much for Flint, Michigan,” Elias says. “No one’s going to come into the store if they think it’s a Louis Vuitton — but it is a high-end experience. … Common Citizen is really a human-centric, purpose-driven brand that is totally unpretentious. We’re not tied to fancy celebrities. The celebrities that we’re tied to are the commoners, the people who look like you and me.”
Manufacturing and Engineering
Michigan Pure Med approaches cannabis cultivation like a manufacturing equation, using lean principles, assembly-line strategies and data-center technology to increase efficiency and produce pharmaceutical-grade cannabis.
The Marshall facility is being built from the ground up with good manufacturing practices (GMP) in mind — something Elias believes states should require in the future.
“If it’s good enough for food and drug, why aren’t we doing it for cannabis?”
The company’s hybrid greenhouse provides the ability to control the environment like an indoor grow, while leveraging the sun to significantly reduce energy consumption. Meanwhile heat and humidity are controlled much like a high-tech data center — something in which Yostos, the company’s president, has experience from his time working for Microsoft.
Currently, Michigan’s regulated market faces a shortage of cannabis, but Elias expects that to be short-lived. Once up and running, he believes the Marshall greenhouse will be a wholesale supplier for not just Common Citizen’s retail locations, but dispensaries across the state, as well. The company’s first five dispensaries are expected to open in 2019; four more are expected in 2020.
Unlike many cannabis industry CEOs, Elias doesn’t come from the world of finance. He’s always worked directly with frontline staff. He says his two decades of experience bringing efficiency to complex acute care medical facilities has taught him to be more than just a surface-level lean practitioner.
“There’s a difference between putting out fires and creating sustainable, transformational change,” he says. “We’re very data-driven and we’re in it for the long haul. We’re not interested in pumping and dumping or creating an illusion of size.”
As engineers, Elias says, the company’s leadership abides by a saying: “In god we trust; all others bring data.”
Tides of Change
Michigan has gone through a turbulent process of transitioning from a medical market that technically didn’t allow dispensaries to a regulated medical market that included shutting down hundreds of unlicensed cannabis retailers.
The transition — and high barriers to entry into the regulated market — has created a rift between some of the state’s legacy caregivers and the new entrants. However, Elias understands that the earlier medical cannabis caregivers laid the groundwork for commercial operators like Michigan Pure Med.
“We owe them the respect,” he says. “We’re not trying to crush the little guy; in fact, we’re trying to bring the little guy into our fold because they’ve got a lot to offer.”
Those growers, he says, have been refining Michigan genetics for years — not surprisingly, the sound of pride can be heard in Elias’ voice, “Michigan genetics, not California genetics.”
Michigan’s ever-shifting regulations were complicated further when the voters legalized recreational marijuana in the 2018 election. Licensing for adult-use businesses is slated to begin in October, with sales likely beginning in 2020. With nearly 10 million residents, Michigan is the third-largest state in the U.S. to legalize recreational marijuana — a market plenty big enough to keep the Michigan Pure Med execs busy while they consider future moves.
“Like any other company, we have aspirations of going national,” Elias says, “but as a lean practitioner and an industrial engineer, we’re going a mile deep and an inch wide. We’re fine-tuning our operations before we spread to other states.”