Seeing Green – The Early Success of Legal Cannabis Sales
Getting started in the legal cannabis industry is anything but easy. Large amounts of patience, time and money are almost required to enter the space. Some states have done a better job than others of setting up parameters for their medical or recreational cannabis markets. One state that is doing very well early on its recreational program is Michigan.
The first midwestern state to legalize recreational marijuana in 2018, Michigan reached its monthly record for cannabis sales of $149 million in March 2021 and then surpassed that total the very next month by reaching $154 million in April 2021. In fact, Michigan is on pace to reach $1 billion in annual sales by the end of 2021.
What is behind the skyrocketing sales? The Arcview Group recently hosted its Town Hall: Michigan virtual event with some of that state’s leading cannabis voices to discuss particulars driving this early success. Event panelists included: Robin Schneider, Michigan Cannabis Industry Association executive director; Rebecca Colette, Calyxeum CEO; LaToyia Rucker, Calyxeum COO; Cory Roberts, Michigan Canna House co-founder; Mark Passerini, Om of Medicine co-founder; Kim Kovacs, Santa Fe Farms chief strategy officer and discussion moderator; and program introductions from Jake Kuczeruk, The Arcview Group vice president of business development.
The panelists shared their personal stories about how they got involved in Michigan’s cannabis industry. They answered audience questions which included one from Oster and Associates’ own PR manager, Patrick Pierce, who asked how the state of Michigan has been so successful at opening up its recreational cannabis market. Additional discussion topics discussed highlighted the importance of social equity initiatives, caregivers who care for terminally ill with cannabis, the relatively low number of current multi-state operators (MSO’s) in Michigan compared to other states, cannabis home grows, and the attractiveness of the Michigan legal cannabis market to investors.
Often a major barrier to entry for aspiring cannabis entrepreneurs are the exorbitant application fees. Like other states that have done (or are in the process of creating), Michigan has established a social equity initiative which, among a list of anticipated goals, includes reduced license application fees for qualified applicants. Michigan has attempted to provide restorative justice through record expungement for Michiganders in its legal system that disproportionately punished communities of color and low income residents for past cannabis arrests and jail sentences.
According to the panelists, there are a number of reasons why Michigan’s cannabis market is doing so well. The high quality products that are produced in the state because of its long, storied history and support for cannabis consumption – before it was legal, jumpstarting when the state established its medical cannabis market in 2008 and the overwhelming support of Michigan voters for recreational cannabis in 2018. Low taxes on cannabis purchased in the state compared to other medical and recreational states is beneficial for consumers, producers and sellers, and all levels of government in the state are ultimately benefiting from increased revenue that is surpassing expectations. Adult use cannabis has enjoyed regulatory support in Michigan whereas other states have had more combative relationships with state cannabis governing bodies. Last but not least is that Michigan has a strong consumer base that supports legal cannabis – recreational and medical.
There is room to grow in the state and space available for cannabis companies to brand themselves in the Michigan market. Not that the state hasn’t had its share of challenges, but Michigan-born companies have gotten off to a very good start as the market continues to mature. It will be worth watching to see Michigan’s rapid cannabis evolution continue.
If your company could use some advice on how to approach this evolving cannabis landscape, be sure to contact us at Oster and Associates. We have been helping brands evolve since 1986.
