Chart: Local approval in Michigan adult-use marijuana program creates uneven business opportunity

Michigan’s strategy for adult-use cannabis businesses empowers localities to control their communities, but it creates disparate business opportunities within the state’s market.

Regulators chose not to restrict the number of recreational marijuana businesses allowed statewide but granted municipalities local approval.

Adult-use sales began in Michigan on Dec. 1, 2019, and could reach $1.4 billion to $1.7 billion annually when the market matures.

Data from the Michigan Marijuana Regulatory Agency (MRA) outlines the approaches taken by 33 state municipalities that opted in to adult-use marijuana commerce through mid-December 2019.

The rules allow Michigan communities to opt out of the adult-use marijuana industry completely or to opt in and restrict the number of licenses allowed in their jurisdictions for each license type.

Events and designated consumption facilities have the greatest number of municipalities choosing to opt out entirely.

MRA spokesman David Harns said it is up to a community to decide how and why to opt out of one or all types of adult-use marijuana business.

“These are local decisions communities are making, for what they feel best represents their municipality,” he said.

Harns cautioned that the data includes unofficial working numbers the MRA posts as a service to the industry and might not reflect the true number of opt-ins.

“The document is changing all of the time because (communities) are continually letting us know they’ve opted in or opted out,” Harns said.

However, there is nothing in the state marijuana law requiring communities to notify the MRA of their intent to opt in or out, which is why the data is unofficial.

Lack of local approval can limit legal market opportunity and growth while also providing an opening for illegal operators to meet the demand that still exists in a community.

On the other hand, limited access to recreational marijuana can benefit licensed businesses within a restricted category by reducing or eliminating competition.

And opportunity might be particularly ripe in “marijuana islands” – those areas surrounded by communities that have opted out – and, thus, could draw consumers from neighboring areas, including bordering states.

Michigan’s recreational market has already drawn enough out-of-state business to prompt troopers in neighboring Ohio to remind residents that travel across state lines with marijuana is illegal.

Maggie Cowee can be reached at [email protected]

One comment on “Chart: Local approval in Michigan adult-use marijuana program creates uneven business opportunity
  1. Chris Cahill JD MBA on

    Interesting to see what the impact will be in Local 2020 elections in those cities where leadership decisions are not in sync with voting of the public on legalization. May become a hot button in some economically depressed cities and change fast.

    Reply

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