It’s official: recreational cannabis is for sale in Michigan. In November of 2018, Michigan voters overwhelmingly approved recreational cannabis through a referendum. On December 1, 2019, the first recreational cannabis stores opened their doors to the public in Michigan.
All 3 recreational dispensaries were open in Ann Arbor, Michigan. At 10 am on December 1, they were legally allowed to move 50% of their medical marijuana stock over to the recreational side of the business.
Since only 3 dispensaries received licensing in time, customers faced long lines and high prices. Recreational cannabis comes with a 10% tax rate, as well as a higher cost due to demand. While some customers balked at the price, this is normal in newly-legalized states. As more dispensaries receive their licenses and demand evens out, so too will the price of cannabis.
However, a November 22, 2019 judgment from the state of Michigan also had an impact on Day 1 sales for recreational cannabis. Fearing health concerns over vitamin E acetate, a harmful additive in vape cartridges that may lead to lung injury, Michigan pulled all cannabis vapes from shelves. Since vapes account for a large percentage of cannabis sales, this temporarily hit sales figures. Cannabis vapes are expected to return after products are tested for safety.
The Michigan Marijuana Regulatory Agency (MIRA) allows adults age 21 and up to purchase cannabis from a dispensary and grow up to 12 plants for personal use. However, provisions of the cannabis referendum allow municipalities to choose whether to allow cannabis sales—and nearly 80% of municipalities have rejected cannabis storefronts.
The reasons vary. Some municipalities say they need more time to create laws around the sale of cannabis. Others claim there isn’t enough retail space to meet demand, while others cite concerns about crime.
To many citizens’ surprise, Detroit was one of the municipalities to reject cannabis sales. The city council voted unanimously in late November 2019 to ban cannabis sales until January 31, 2020. This made Detroit the largest city in Michigan to ban cannabis sales, claiming that city hall needs more time to make laws first. However, progress will likely be slow, as lawmakers talk about only drafting legislation in time for the January 31 deadline.
While it’s still early days for legalization in Michigan and the state is ironing out many details, it promises to be a fruitful industry. In fact, recreational cannabis is expected to hit the $180.5 million mark in its first year alone. It’s yet another promising frontier for investors in the Midwest.