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.
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 $25 million Sale-Leaseback with Holistic Industries
November 2018 | Acreage Holdings acquires Michigan-based Blue Tire Holdings LLC
At $1.5B and growing, the Great Lakes State is thriving. 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. We don't expect material price declination for the foreseeable future. In the end, Michigan is likely to develop similarly to Colorado - this is a state worth watching.