The Michigan Regulatory Agency("MRA") opened up the medical caregiver program in 2008, resulting in mature supply chains within the Michigan cannabis industry. When adult use legislation was passed in 2019, the MRA allowed medical caregivers to supply adult use retail and manufacturing operators. This allowed the Michigan adult use cannabis market to have immediate supply until the MRA cut-off medical caregivers' ability to supply the adult use operators in September 2020 as the adult use market matured.
Michigan is an unlimited license market; however, the MRA has given the power to local municipalities to opt-in or out to the state's cannabis regulatory framework, of which nearly 80% have opted out.
August 2022 | TerrAscend Corp completed its acquisition of Kisa Enterprises fro $29MM
February 2022 | Red White and Bloom completed its acquisition of PharmaCo in an all-stock transaction
September 2021 | Skymint acquired 3Fifteen to become the largest Michigan SSO
September 2021 | TerrAscend announced its acquisition of GAGE for $545MM
September 2020 | Red White and Bloom acquired Platinum Vape
Wholesale prices for biomass plummeted in late 2021, resulting in a plethora of new and inexpensive carts, infused products, and cheap flower flooding the market. Marginal market participants need to seek acquirers as their businesses are not sustainable over the long term. Larger, stronger market participants need to consolidate to take cultivation capacity out of the market and stabilize pricing. In short, all players in Michigan better be making moves this upcoming year.
Ranked #3 in the U.S., Michigan was a $2.3B market in 2022, and is on track for $3.0B in 2023. Despite the large market size, Michigan has generated little interest from the major MSO's. They have seen fit to deploy scarce capital resources in states with much more restrictive licensing regimes. The previously mentioned market turmoil in late 2021 ensures a continuation of the MSO's "wait and see" approach and will constrain capital flows into the Michigan market. In other words, in-state operators are effectively on their own for the foreseeable future.
*Class A licenses permit up to 100 plants. Class B permit up to 1,000 plants. Class C permits up to 2,000 plants, and cultivators are allowed to stack up to five Class C licenses.
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