Notable Players

A Deeper Look At This State

Regulatory Framework

The Michigan Regulatory Agency ("MRA") opened up the medical caregiver program in 2008 which has resulted 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 the medial 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 power to local municipalities to opt in or out to the state's cannabis regulatory framework, which nearly 80% have opted out.

There is no better example than Detroit, which has established a regulatory framework for awarding 75 new licenses, half of which will be dubbed the "Detroit Legacy." Applicants can only qualify for the "Legacy" certification if they have either lived in Detroit for 15 of the last 30 years, lived in Detroit for 13 of the last 30 years and are considered low-income, or lived in Detroit for 10 of the last 30 years and have a past marijuana-related conviction. We're glad we're not sifting through that paperwork.

Notable Market Activity

September 2021 | Skymint acquires 3Fifteen to become the largest Michigan SSO

September 2021 | TerrAscend announces to acquire GAGE for $545MM

July 2021 | Lantern launches on-demand recreational cannabis delivery in Grand Rapids

September 2020 | Red White and Bloom acquires Platinum Vape

September 2020 | IIPR closes $25MM Sale-Leaseback with Holistic Industries

November 2018 | Acreage Holdings acquires Michigan-based Blue Tire Holdings LLC

What's the Play?

At $1.5B and growing, the Great Lakes State is in the top 5 mature markets. Major MSOs are taking a wait-and-see approach to Michigan, but this market ultimately is too large to ignore. We anticipate continued capital inflows to support existing and pending projects. Adult-use cannabis in Michigan is projected to be a $2.4B market by 2024, and operators adept at competing in rapidly maturing markets will find sufficient growth opportunities.

Current wholesale prices support additional investment in production and retail capacity, but the number of active projects ultimately will impact the supply-demand equation. Consolidation is happening throughout the state. With the 280E burden on stand alone retailers, the smaller operators are having a hard time staying afloat and maintaining buying power from the vertical competitors in the state. Price declination has begun on as a result of "croptober"  has created an oversupply of biomass as a result of the major outdoor grow and cultivation expansion throughout the state. In the end, Michigan is likely to develop similarly to Colorado - this is a state worth watching.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~10MM

Annual Tourists

~
125
MM

Medicinal Legalization

2008

Adult-Use Legalization

2019

First Adult-Use Sales

2019

MMJ Patients

~252K

Monthly Revenue

~$161MM

Cultivation Cap

2000 Plants

Cultivation Licenses

433/No Limit (Issued/Limit)

Retail Licenses

329/ No Limit

Retail License Cap per Operator

No Limit

Vertical Integration

Allowed

Delivery

Allowed

MMJ Qualifications

Less Restrictive

State Population / # Retail Licenses

~56K

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

Top Cultivators

Notable Market Activity

Quick sentance is needed or wanted

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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Chicago
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Los Angeles
Head of Debt Capital Markets
Chicago
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