In a recent ruling by the Sixth Circuit, Local Roots, a cannabis company, was denied the opportunity to challenge a settlement between the City of Perry, Michigan, and its competitor, Liberty Wellness. This decision upholds the allowance of more than one dispensary in Perry, a point of contention for Local Roots.
The case unfolded as Local Roots, which had secured a conditional marijuana retailer license in late 2022 under the assumption of being Perry's sole dispensary, attempted to intervene in a lawsuit filed by Liberty Wellness against the city. Liberty Wellness's owner, Jonathan Moses, had sued the city in October 2022, arguing that the city's decision to issue only one license was against the voters' preference for eight licenses. Despite Local Roots filing a motion to intervene, the trial judge concluded the case with prejudice before addressing their motion.
During oral arguments in October, the skepticism of the circuit judges towards Local Roots' position was evident. U.S. Circuit Judge John B. Nalbandian, who later authored the panel's opinion, remarked on the unusual nature of Local Roots' attempt to keep the lawsuit active despite both primary parties seeking its conclusion.
The Sixth Circuit panel supported the lower court's decision to endorse the settlement between Liberty Wellness and the City of Perry, effectively dismissing the action with prejudice. This meant Local Roots could not pursue claims within this lawsuit to maintain its status as the only cannabis retailer in Perry.
The panel further clarified that Local Roots' motion to intervene was moot due to the immediate agreement between Liberty Wellness and the city to dismiss the case, leaving no room for intervention. Additionally, the panel noted that all parties in a litigation must typically agree to a settlement before dismissal, but this doesn't apply until a motion to intervene is granted, which in this case, it wasn't.
In a significant development in the cannabis industry, Stash Ventures, known for its notable brands including Timber Cannabis Co., High Minded, and High Minded Creations, has finalized the acquisition of Cloud Cannabis. This strategic move, to be completed on January 23rd, marks a major expansion for Stash Ventures in the cannabis market.
Under the terms of the acquisition, Cloud Cannabis will continue to operate under its current brand name. This decision ensures that the established market presence and consumer loyalty towards Cloud Cannabis remain intact, while Stash Ventures broadens its reach and strengthens its portfolio in the cannabis sector.
Stash Ventures' acquisition of Cloud Cannabis represents a pivotal step in their business strategy. By retaining the Cloud Cannabis brand, Stash Ventures acknowledges the value and recognition Cloud Cannabis has built with its customer base. This approach allows for a seamless transition and continuity in customer experience, which is crucial in the competitive cannabis market.
The acquisition is a clear indicator of the dynamic nature of the cannabis industry, where consolidation and strategic partnerships are becoming increasingly common. For Stash Ventures, owning Cloud Cannabis and its licenses provides an opportunity to diversify their offerings and reinforce their position in the market.
As the cannabis industry continues to evolve, moves like this acquisition by Stash Ventures are expected to shape the future landscape of the market. Both companies bring unique strengths to the table, and their combined resources and expertise are poised to create a formidable presence in the cannabis sector.
In the evolving landscape of Michigan's cannabis industry, a specific segment, the rosin market, is experiencing significant economic challenges. Rosin, a popular cannabis concentrate known for its purity and potency, is currently caught in a precarious financial situation. This is largely due to the discrepancy between production costs and retail pricing.
On the producer side, the situation is becoming increasingly untenable. The current market rate for rosin sold from producers to retailers is often lower than the production costs. Despite this, retailers continue to charge consumers standard prices, frequently marking up the product by 3 to 4 times its wholesale cost.
This issue seems to permeate all levels of the market, including both the caregiver (CG) market and top-tier licensed producers. While some companies and CGs have been thriving, charging over $50 per gram, there's a growing concern about market sustainability. The introduction of new players every few weeks suggests an impending saturation point.
A critical threshold appears to be at the $40 retail price for a single gram of rosin. When prices drop to this level, it indicates that producers are operating on minimal profit margins or potentially incurring losses. For instance, a wet pound of cannabis, roughly 2,250 grams, might yield about 67 grams of rosin at a 3% conversion rate. This amount, costing around $600 to produce, would only generate $1,340 at a sale price of $20 per gram. After deducting the initial material expense, producers are left with a narrow margin before accounting for labor, testing, packaging, and transportation costs.
For the rosin market to remain viable, several changes are essential. Producers must adapt to survive on a 15-20% margin and focus on strains that yield higher rosin percentages, albeit often with less desirable terpenes. Consumers would need to accept paying higher prices, around $50-$60 per gram. Retail shops, currently operating on 2-5x markups, would also need to adjust their pricing strategies, although this remains unlikely.
Producers are finding this situation increasingly discouraging, especially in Michigan. The imbalance where retailers profit significantly more than the producers is not a new phenomenon in the cannabis industry, but it has become more pronounced recently. Vertical integration, where companies control multiple stages of the production and distribution process, can mitigate some of these challenges, but tax liabilities remain a significant burden.
Despite these challenges, there will always be a market for innovative and high-quality products. Even well-established legacy CG brands are adjusting their prices to stay competitive. Smaller producers with strong brand recognition, like 710 Labs, can command higher prices than larger producers, regardless of quality, due to lower overhead costs.
The current dynamics in Michigan's rosin market reflect broader trends in the cannabis industry, highlighting the need for balance between production costs, retail pricing, and consumer expectations.
In Escanaba, Michigan, two new cannabis dispensaries are set to open in 2024, bringing a fresh dynamic to the local marijuana industry. The former Hudson's Restaurant building, a well-known local landmark, is undergoing a transformation as it prepares to house The Fire Station, a cannabis dispensary. This new establishment will be located conveniently close to the Nirvana Center, another active dispensary in the area.
The Fire Station, known for its presence in the cannabis market, has announced plans to commence construction of this new facility within the 2024 fiscal year. This development is part of the growing trend of repurposing existing structures for cannabis retail operations, reflecting the industry's integration into local communities.
Additionally, Wacky Jackz is set to open its second dispensary location. Positioned strategically on HWY 2, just at the threshold of Escanaba, this new site is currently under construction. A representative from Wacky Jackz has indicated that the construction is on track, with an expected completion and opening slated for the spring of 2024.
Escanaba's cannabis market is already home to several dispensaries, including Elevated Exotics and Lume. Elevated Exotics is conveniently located downtown at the corner of 10th and Ludington, while Lume is situated on Willow Creek Road. The introduction of The Fire Station and Wacky Jackz will further expand the choices available to consumers in the region, indicating a robust and growing cannabis industry in Delta County.
Port Huron, a city known for its vibrant community and dynamic business landscape, is poised to welcome an exciting new addition to its retail sector. Plans are underway for the opening of a fourth adult-use marijuana shop, the Nirvana Center, located strategically at the intersection of 10th Street and Lapeer Avenue. This development represents not just an expansion of the city's cannabis industry but also a significant transformation of a familiar city landmark.
The Nirvana Center, earmarked for the site at 1007 Lapeer Ave, is slated to occupy a substantial 20,800-square-foot space, previously home to a Pizza Hut restaurant. The project, recently greenlit by the city's planning commissioners, involves the repurposing of the vacated storefront. The site is expected to don bright turquoise signage, a visual testament to its new role in the recreational cannabis market.
Morgan Mansour, the project manager overseeing the Nirvana Center's development, spoke about the strategic choice of location. He highlighted the advantages of the site, including its visibility and accessibility due to the existing traffic flow. Mansour emphasized the significance of the investment involved in transforming the site and shared plans to integrate the store into the local community. A key aspect of this integration is the creation of new jobs. The store is expected to employ at least 15 individuals, with the number potentially rising to 20, depending on the balance of full-time and part-time positions. In a nod to local economic development, the project is also looking to engage local contractors for the required construction and renovation work.
The journey of the Nirvana Center in Port Huron is part of a broader narrative involving Revolution Strains, Inc., which initially received local permitting for a retail operation under the city's cannabis ordinance. This ordinance, approved by voters, paved the way for various cannabis-related businesses, including consumption lounges and microbusinesses, to set up shop in the city. However, the implementation of these plans was delayed due to legal challenges. Applicants for local licensure found themselves entangled in litigation, primarily centered around the scoring system used in the ordinance. This legal impasse continued until early 2023, when the original provisional license recipients, including the Nirvana Center, were finally allowed to proceed with their plans.
The approval of the Nirvana Center's special use permit by the planning commission is a critical milestone. This permit, a requirement under local zoning laws, marks the Nirvana Center as the fourth cannabis outlet within the last year to navigate the city's regulatory landscape successfully. This follows the developments of other cannabis retailers in the city, including Exhibit Cannabis, which experienced a fire incident on site, JARS Cannabis located downtown, and Ox Tail Inc., operating under the name Moses Roses in the former Ernest Camera Shoppe. Each of these outlets had planned openings towards the end of the previous year, though as of this week, no official opening dates have been announced.
The choice of the former Pizza Hut location for the Nirvana Center was a strategic shift from the initially planned site at 2569 Lapeer Ave, which was a Peak Performance Oil and Lube establishment. Mansour elaborated on the decision to move locations, highlighting the suitability of the former Pizza Hut site. He noted that under the local licensure ordinance, transferring licenses or changing addresses is permissible, provided the city clerk's office is duly notified.
The Nirvana Center's development at 1007 Lapeer Ave is part of a larger picture, with multiple sites across the city being considered for cannabis retail operations by various operators. One such operator, Portage Acquisitions, Inc., has submitted applications for several sites and has been granted licenses for locations elsewhere in the city. However, unlike the Nirvana Center, Portage Acquisitions has not yet brought a special use request to the planning commission for any of these sites.
During the planning commission's discussion, the plans for the Nirvana Center were reviewed briefly, with Mansour affirming the thoroughness of their preparatory work. He expressed optimism about the timeline for the store's opening, anticipating readiness for operation within 90 days following structural upgrades, particularly to the building's roof. The selection of the former Pizza Hut site over other locations was attributed to its overall suitability for the intended purpose.
The Nirvana Center in Port Huron is poised to become the 14th outlet in the state of Michigan under this brand, with another location set to open soon in Royal Oak. Mansour spoke about the significance of revitalizing the long-vacant site at 10th and Lapeer, bringing a new lease of life to an area familiar to many in the community.
Addressing potential concerns from the community, Mansour assured planning commissioners of comprehensive security measures, including 24-hour surveillance. Additionally, the issue of odor, often a concern in cannabis retail operations, has been proactively addressed with plans to neutralize the air within the store. Mansour confidently stated that the experience of operating multiple outlets has equipped the Nirvana Center team with effective solutions to such challenges, ensuring that their retail operations will not adversely impact the surrounding area.
The introduction of the Nirvana Center to Port Huron's cannabis retail scene marks a significant development for the city. It reflects not only the growth of the cannabis industry but also the adaptive reuse of commercial spaces, contributing to the revitalization of the local economy. This project, with its emphasis on local employment, community integration, and sensitive operational practices, exemplifies a model of business development that aligns with the city's broader goals of sustainable growth and community enhancement.
Pleasantrees has launched an innovative contest, the Mystery Weed contest, offering cannabis enthusiasts an engaging way to test their knowledge of various strains. In a unique twist that extends the festive spirit into the New Year, Pleasantrees is introducing mystery strains throughout January, challenging consumers to identify them correctly for exciting rewards.
During this month, Pleasantrees is bringing back four of its most popular cannabis strains, but with a catch: their identities are hidden. To be in the running for the grand prize, participants need to correctly guess all four mystery strains. Those who successfully identify three out of the four will still win a prize – a free ounce of Pleasantrees' premium craft cannabis.
To be eligible for the contest, participants must be members of the Loyaltrees loyalty program at the time of their contest entry. Joining the program is easy and free, accessible through the Pleasantrees app, by texting "JOIN" to (313) 662-2747, or by visiting their rewards website.
The mystery strains will be available for purchase in 1/8th quantities for a limited time. An entry form for the Mystery Weed contest can be accessed via a QR code in-store at the time of purchase. This form will offer a hint for each strain, aiding participants in their guesses. The strains will feature a diverse range of terpene profiles and effects, adding to the challenge and intrigue.
The highlight of the contest is the grand prize – a trip for two to Miami, Florida, which includes airfare and a two-night hotel stay. The contest concludes on January 31st, 2024, and is open to participants 21 years of age or older.
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