Michigan’s commercial cannabis industry is still young, but it’s well on its way to greatness.
Michigan is second only to California in the number of registered medical patients, and it also recognizes out-of-state patient registration cards. The state’s adult-use cannabis market is even larger, because it draws from other states in the highly populated Midwest region.
Effective June 22, 2020, Michigan adopted permanent rules combining commercial medical and adult-use regulations. The rule changes included: extending licensing prequalification from one year to two years; establishing remediation protocols for chemical residue and microbials; allowing more retesting of products; and allowing a grower to forego the testing requirement on plant material being sold to processors to make concentrates, with approval.
The state of Michigan commissioned a March 2020 study by Michigan State University, titled “The Market for and Economic Impact of the Adult-Use Recreational Marijuana Industry in Michigan.” The report, written by William Knudson, Ph.D. and Steven Miller, Ph.D., estimated that annual retail sales will climb to $3 billion with a total economic impact in excess of $7.8 billion.
Employment, the report says, “is estimated to be 13,500 with a total economic impact on employment in the state of 23,700. Total tax revenue raised is $495.7 million of which $298.6 million is excise taxes and $197.1 million are in the form of sales taxes.”
Weekly recreational sales, at more than $10 million, recently exceeded medical sales. In total, the recreational program has generated revenues of $150 million since legal sales began December 1, 2019.
The coalition that put the adult-use law on the ballot in 2016 also ensured licensing would be a more open process, instead of restricting its numbers like other states (Cannabis Counsel® founder Matthew Abel and I were members of MILegalize, the grassroots partner).
Also, allocations of tax revenue were created as follows: Tax revenue from cannabis sales is allocated to provide $20 million annually until 2022, or for at least two years, to fund research on the efficacy of cannabis in treating medical conditions of veterans and preventing veteran suicide.
Upon appropriation, unexpended balances must be allocated as follows: (a) 15% to municipalities where cannabis retail stores or microbusinesses are located; (b) 15% to counties where cannabis retail stores or microbusinesses are located; (c) 35% for K-12 education; and (d) 35% to fix roads.
Michigan’s huge market size and industry expertise make it especially attractive for investment.
Thomas Lavigne | Cannabis Counsel®
Thomas MJ Lavigne, JD is Managing partner at Cannabis Counsel(R), providing legal services to cannabis businesses pursuing commercial licenses under Michigan’s Medical Marihuana and Adult-Use laws. He has practiced law for over 30-years, is licensed in Mich, Hawaii and NC, and has appeared before dozens of State and Federal courts. The synergies that have come together at Cannabis Counsel(R), a niche law firm, make it the core of Michigan’s cannabis community, and among the country’s leading legal authorities in cannabis law.