Michigan has emerged as a formidable player in the U.S. cannabis market, securing the second spot in state-by-state cannabis sales for the first half of 2024. The state reported a staggering $1.6 billion in sales, trailing only behind California, which amassed over $2 billion despite facing significant challenges.
California, with its well-established cannabis market, continues to lead the nation in total sales. However, the state is grappling with declining legal market sales attributed to stiff competition from the illicit market and high taxes. Despite these issues, California still averages around $347 million in monthly sales.
Michigan's rapid ascent in the cannabis industry is noteworthy, especially considering that it only began legal adult-use cannabis sales in 2019. The state's average monthly sales reached $270 million in the first half of 2024, reflecting robust consumer demand and effective market growth strategies.
While California leads in total sales, Michigan outshines the Golden State in per capita sales. For the first half of 2024, California's per capita sales for its 21+ population stood at $74.90. In contrast, Michigan reported an impressive $233.97 per capita for the same demographic. This substantial difference underscores Michigan's efficient market penetration and strong consumer base.
Both states witnessed their highest sales months in March, April, and May, contributing significantly to their half-year totals. The thriving market activity during these months played a crucial role in solidifying their positions as the top two cannabis markets in the U.S. California and Michigan are the only states to surpass the $1 billion mark in legal cannabis sales so far this year.
Several factors contribute to Michigan's impressive performance in the cannabis industry. The state's relatively recent entry into the legal market allowed it to adopt best practices from other states, enhancing regulatory frameworks and business operations. Additionally, Michigan's competitive pricing and diverse product offerings have attracted a wide range of consumers.
Michigan's regulatory environment has also been conducive to market growth. State officials have implemented policies that support both businesses and consumers, fostering a stable and flourishing market. This approach has enabled Michigan to swiftly climb the ranks and compete with long-established markets like California.
As the cannabis industry continues to evolve, Michigan's strong performance sets a precedent for emerging markets. The state's ability to generate high sales figures and maintain a strong per capita sales rate demonstrates its potential for sustained growth. Observers will be keenly watching Michigan's market strategies and regulatory developments as they unfold in the latter half of 2024 and beyond.
The Kalamazoo County Board of Commissioners has unanimously approved revisions to its employee drug testing policy, introducing new provisions regarding legal substances. This decision was made during the board's meeting on Tuesday, July 16th.
Previously, the county's drug-free workplace policy stipulated strict disciplinary actions for employees testing positive for drugs or alcohol. These measures could range from disciplinary action "up to and including discharge for a first offense" to other corrective actions, depending on individual circumstances.
The updated policy now provides the county with the discretion to decide whether an employee should face disciplinary action for testing positive for legal drugs or alcohol. Despite this change, the county maintains a zero-tolerance stance on illegal drugs, according to county spokesperson Taylor Koopman.
A significant modification in the policy is the replacement of the term "will" with "may" concerning potential disciplinary actions. This change grants the county greater flexibility in handling cases involving legal substances.
The agenda packet did not provide a specific reason for the policy revision, and Koopman did not immediately respond to inquiries regarding the motivation behind this change.
Additionally, the board voted to eliminate a policy related to medical marijuana, aligning the county's regulations with state laws.
Monday evening, executives from SDRK Group, LLC, operating the Shango cannabis cultivation facility on Saginaw Street at the former Lapeer Grain site, presented their ongoing efforts to address persistent odor issues to the Lapeer City Commission. The problem has plagued the area for about a year, prompting community concern and regulatory scrutiny.
Andy Shango, a representative of the facility, attended the meeting along with Operations Director Rick Thornton and consultant Joe Israel. Shango emphasized the importance of resolving the odor issue not only for their building but also to prevent blame from falling on other nearby facilities.
Thornton detailed their two-part strategy to mitigate the cannabis odor. The primary solution involves implementing negative pressure in the cultivation, drying, and storage areas. "Negative pressure should eliminate the odor," Thornton explained, estimating that this system could be operational within 90 days, pending the delivery of necessary equipment. If this measure proves insufficient, a secondary, more costly option involves negatively charging the air, using advanced air scrubbers and ozone gas. This process could take up to 120 days to complete.
Ozone technology is a clean method for purifying air in cannabis facilities. Industrial ozone generators produce ozone gas by passing oxygen through a high-voltage electrical discharge, which splits oxygen molecules into individual atoms. These atoms then combine with other oxygen molecules to form ozone gas, which reacts with the cannabis odors and reverts to oxygen, leaving no harmful residues.
"One way or another, we will resolve this," Shango assured, advocating for the City to establish a comprehensive odor ordinance applicable to all facilities.
In April, the City of Lapeer issued a citation to SDRK for the persistent odor. The Michigan cannabis regulators have indicated that SDRK's grow license renewal may be contingent on resolving this issue.
On July 10th, SDRK's legal counsel, Michael J. Gildner, sent a letter to Lapeer City Manager Mike Womack outlining their ongoing efforts to mitigate the odor complaints. "My client disputes the City's assertion that it is the sole source of odor complaints and believes it has been unfairly targeted. Nonetheless, SDRK is committed to making operational changes to be a better neighbor," Gildner wrote.
Womack responded with skepticism about the timeline. "I've heard various estimates, from 90 days to 120 days. What matters is eliminating the odor," he said.
According to SDRK documents provided to city officials, the facility began cannabis cultivation in June 2023, gradually increasing to a maximum of 4,000 plants housed in renovated pole barns. The first odor complaint from a city building inspector was recorded in September 2023.
Coldwater Mayor Tom Kramer is advocating for the cessation of cannabis grow facilities within the city's D-2 heavy industry zones.
In August of last year, the Coldwater Planning Commission approved a motion initiated by Kramer to begin phasing out special use permits for cannabis grow operations in the industrial park. Despite this approval, no further action has been taken since.
During a Planning Commission meeting on Monday, Kramer suggested that with Amanda O'Boyle succeeding the retiring Meghan Angell as City Attorney, there is now an opportunity to advance this initiative.
Kramer acknowledged that market conditions might ultimately influence the future of these grow facilities.
Notably, retail cannabis operations in the city would remain unaffected by this proposed change.
Following further discussions, the Planning Commission members reached a consensus in support of Kramer's proposal.
City Manager Keith Baker mentioned that a draft of the proposed changes could be prepared for review at the next Planning Commission meeting.
Senator Gary Peters, a Democrat from Michigan, has introduced a new bill aimed at preventing federal agencies from using past cannabis use as a factor in employment and security clearance decisions. The bill, known as the Dismantling Outdated Obstacles and Barriers to Individual Employment (DOOBIE) Act, represents a significant effort to modernize federal employment practices in light of evolving cannabis laws.
Senator Peters submitted the DOOBIE Act last week, marking the latest legislative push to ensure that prior cannabis consumption does not negatively impact an individual's eligibility for federal employment. This initiative reflects growing recognition of the need to align federal employment policies with the broader legalization trends seen across many states.
The DOOBIE Act specifies that federal agencies covered by the legislation "may not base a suitability determination with respect to an individual solely on the past use of marijuana by the individual." Additionally, the White House Office of Personnel Management (OPM) would be required to adopt and enforce this policy.
Furthermore, the bill stipulates that "the head of a Federal agency may not base a determination that a covered person is ineligible for a security clearance solely on the past use of marijuana by the covered person." This provision aims to prevent prior cannabis use from being a barrier to obtaining the necessary credentials for federal employment.
Under the proposed legislation, federal agencies would also be prohibited from using past cannabis use as a reason to deny a personal identity verification credential. This credential is essential for federal employees to access various facilities and information, making this an important aspect of the DOOBIE Act.
The Director of National Intelligence (DNI) would be tasked with updating regulations to align with the new cannabis policies and assist other federal agencies in implementing these changes. Notably, the DNI has previously stated that it is not the current policy of the federal government to deny security clearances based solely on past cannabis use, acknowledging that such practices can hinder recruitment efforts, especially as cannabis legalization becomes more widespread.
Senator Peters' legislation parallels a bipartisan House bill introduced last year, which aimed to provide employment protections and prevent security clearance denials for past and current cannabis use. However, an amendment in committee narrowed the scope of that bill to address only past consumption.
The DOOBIE Act is part of a broader movement to modernize federal employment and security clearance policies, ensuring they reflect contemporary attitudes towards cannabis use and support the recruitment and retention of qualified individuals in the federal workforce.
Michigan's cannabis market saw a minor decline in June 2024, with total sales reaching $278.8 million, marking a 0.3% decrease from April. Despite the slowdown, sales increased 6.9% year-over-year, the slowest annual growth in over two years. Medical cannabis sales plummeted 78.4% year-over-year to $1.4 million, while adult-use sales rose 9.1% to $277.4 million, although they experienced a slight 0.2% sequential drop. The average price of adult-use cannabis flower continued to decline, reflecting an ongoing expansion in supply.
Overall Market Performance:
Medical vs. Adult-Use Sales:
Pricing Trends:
The expansion of supply and distribution networks is expected to continue driving the market forward.
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