Michigan Cannabis Sales Rise in April Despite Lower Revenue

Published 3 days ago Business & Industry
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Michigan cannabis retailers experienced a 9.3% increase in sales volume in April compared to March, although the revenue generated saw a 3.5% decrease.

In April, Michigan retailers sold a total of 573,206 pounds of cannabis. Of this, 569,620 pounds were purchased by adult-use customers, and 3,586 pounds by medical marijuana patients, generating a total of $278,546,444. Recreational consumers spent $276,685,183, while medical marijuana patients accounted for $1,861,261 of the sales, according to the Michigan Cannabis Regulatory Agency (CRA).

In contrast, March saw the sale of 524,285 pounds of cannabis, with 520,469 pounds sold to recreational users and 3,816 pounds to medical patients. The total revenue for March was $288,843,279, with $286,790,258 from adult-use customers and $2,053,021 from medical marijuana patients, as reported by the CRA.

The decline in revenue despite the increase in sales volume can be attributed to a drop in the average price per ounce. The CRA noted that the average price for an ounce of recreational cannabis fell from $90.70 in March to $86.61 in April. Similarly, the average price for an ounce of medical cannabis decreased from $101.22 in March to $99.74 in April.

Despite the falling retail prices, there remains strong interest in cannabis cultivation. The state continues to receive numerous applications for Class C cultivation licenses, which allow for the cultivation of up to 2,000 cannabis plants. In April, 335 out of 336 new medical marijuana business applications were for Class C grow licenses. Additionally, 30 of the 117 new adult-use business applications were for Class C cultivation permits, according to the CRA.

The Gas Station Set to Open as Wayland's Latest Cannabis Retailer

Published 5 days ago Business & Industry
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Jarred Biggs and Dennis Weiss, the business duo behind Middleville's inaugural cannabis dispensary, are expanding their footprint with a new venture, The Gas Station, slated to open next month in Wayland, Michigan. The new dispensary is located at 1124 W. Superior St., strategically positioned less than half a mile east of the U.S. 131 interchange.

Biggs, who has familial ties to the area, selected the Wayland location for its proximity to Gun Lake Casino, approximately 4 miles south. The casino is currently undergoing significant renovations and a $300 million expansion that includes a new 252-room hotel, spa, pools, and a restaurant. This development influenced Biggs’ decision, as he aims to capitalize on the regional growth.

"The current developments are an opportunity we couldn't overlook," Biggs remarked. He, along with Weiss and their partners from Grand Rapids, entrepreneurs Jonathan Jelks and Willie Jackson, have previously collaborated on The Botanical Co., which opened in Middleville in October 2023.

Both The Botanical Co. and The Gas Station have been constructed with the expertise of Grand Rapids-based CopperRock Construction Inc., each project representing an investment of $1.6 million. While The Gas Station will resemble The Botanical Co. in design and operation, it will be slightly smaller in scale.

Beyond Wayland, the team is planning to expand further, aiming to establish five to six more stores across Michigan, with aspirations to venture into other states. All future outlets will operate under The Gas Station brand. According to Biggs, the focus will soon shift towards Grand Rapids for their next opening.

Biggs noted a distinct lack of local ownership in West Michigan's cannabis market, with many operators and growers based elsewhere in the state. This gap presents a strategic advantage for his group, emphasizing local ties and commitments.

Their strategy includes not just retail but also cultivation, with Biggs spearheading the opening of a 2,000-plant grow facility, Bigg Canna, in Edmore in fall 2023. Additionally, he launched the cannabis brand “Pablo” and is developing a second, larger Class C grow facility in Manistee.

"This vertical integration is crucial for our growth. It not only allows us to control product quality across our locations but also helps in securing shelf space in other dispensaries," explained Biggs.

Their arrival in Wayland marks a new chapter, as the city already hosts established cannabis retailers, unlike Middleville, which was a new market for the industry. This situation requires a more calculated approach to marketing and customer service, as Biggs acknowledged the need for a competitive edge.

Jelks, who has a diverse background in the beverage and bar industry, finds the partnership with Biggs beneficial, leveraging his deep understanding of the cannabis sector. "Our combined efforts, particularly in innovative marketing strategies, set us up for positive momentum," Jelks commented.

Westland Tool and Die Shop Transitions to Cannabis to Revive Family Business

Published 1 week ago Business & Industry
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A long-standing tool and die shop in Westland, Michigan, is pivoting to the cannabis industry to breathe new life into its business. R&A Tool and Engineering, located at 39127 Ford Road, is planning to establish a cannabis microbusiness on its premises, named Ancient Herbs.

The Westland City Council previously greenlit the initiative last summer, and now, owner Greg Raymond is pursuing special land use approval to operationalize the microbusiness. This move was supported by the city's planning commission, which recently recommended approval during their meeting on May 7th.

Raymond expressed his commitment to the new venture, saying, "I’m going to do my best to make this a win-win situation for the city and for my employees. I understand the responsibility that comes with a license, and I’m willing to take that on." He sees the introduction of the cannabis microbusiness not only as a strategic shift but as a way to sustain a property that has belonged to his family since 1968.

Cannabis microbusinesses are unique in that they are allowed to cultivate up to 150 plants on-site, and can also process and sell their products directly to consumers from the same location. This model supports a more distinctive product offering due to its independent operation.

The proposed business would mark the second cannabis microbusiness in Westland, a city that anticipates a notable increase in tax revenue from such establishments over the next six years.

Despite the change in business focus, Raymond plans to continue operating the tool and die shop as long as feasible, though he acknowledges it will eventually close. The industry has faced challenges, particularly as many manufacturing jobs have moved overseas. "We’re just trying to play the cards we were dealt," Raymond commented on the economic shifts.

The addition of the cannabis microbusiness is expected to create approximately 30 new jobs, contributing to local employment and economic diversity.

C3 Industries Invests $16 Million in New Connecticut Cannabis Facility

Published 1 week ago Business & Industry
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C3 Industries, a prominent cannabis operator based in Ann Arbor, Michigan, recently finalized a significant investment deal, securing $16 million for the development of a new cultivation facility in Connecticut. The 58,500-square-foot facility will be situated in East Hartford, with NewLake Capital Partners Inc., a real estate investment trust also based in Connecticut, facilitating the transaction. The property acquisition cost NewLake $4 million, with an additional $12 million allocated towards construction expenses.

This strategic expansion marks C3 Industries' entry into the Connecticut market, adding a fifth state to its operational footprint. This growth positions C3 as Michigan's largest multistate operator, particularly notable during a period when many in the industry are struggling. In stark contrast, C3 is on track to achieve $250 million in revenue this year, boasting a robust profit margin. This success is largely attributed to the company's cautious and methodical approach to growth, especially in the competitive Michigan market.

Ankur Rungta, CEO of C3 Industries, credits the company's success to its origins and operational strategies. "We started our business in Oregon, which was a really challenging market with oversaturation," Rungta explained. "Coming to Michigan, we built our largest platform. We've always been mindful not to expand production beyond what the market can sustain. This has been a breeding ground for disciplined operators and our conservative approach has certainly paid off."

The national cannabis market is currently experiencing significant financial pressures, with many multistate operators (MSOs) retracting operations in response to these challenges. For instance, New York-based Curaleaf has closed dispensaries in multiple states including Michigan, responding to a combination of high effective tax rates and aggressive regulatory environments.

C3 operates 11 of its High Profile Cannabis retail locations in Michigan, alongside outlets in Massachusetts, Missouri, New Jersey, and Illinois. Plans are underway to expand retail operations in Connecticut, where two new stores are expected to open, with additional acquisitions targeted in the near future.

The company's Michigan locations are particularly lucrative, generating nearly double the statewide average revenue per store. This success is largely due to C3's vertical integration strategy, where the company relies heavily on its own grown cannabis for its product line.

Despite these achievements, not all endeavors have been successful. C3 recently had to close its Flint location and sell its Ann Arbor dispensary, which was initially expected to be highly profitable. "That was painful to let go," Rungta remarked, highlighting the challenges even successful operators face in this volatile market.

Ankur Rungta, along with his brother Vishal Rungta who serves as C3’s president and CFO, both hold degrees from the Stephen M. Ross School of Business at the University of Michigan. Ankur also holds a law degree from the University of Michigan Law School, bringing a strong educational background to his leadership role.

Looking forward, C3 is shifting towards an acquisition strategy, seeking opportunities in new markets such as Ohio. "We're now more focused on acquiring larger operating portfolios," Ankur Rungta shared, indicating a strategic pivot from organic growth to targeted acquisitions.

Building a Cannabis Empire: Inside C3 Industries' Expansion Strategy

Published 1 week ago Business & Industry
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C3 Industries, a Michigan-based cannabis company, was founded in 2018 by brothers Ankur and Vishal Rungta. In a few short years, it has expanded significantly. Initially starting in one state, C3 now operates in five states, with plans to enter a sixth soon. The company manages 24 High Profile dispensaries across Michigan, Missouri, Massachusetts, Illinois, and New Jersey, with Connecticut set to join the list. Additionally, C3 oversees more than 250,000 square feet of cultivation and manufacturing space across these states, although Illinois and New Jersey currently function as retail-only markets.

The company's brand portfolio includes Cloud Cover, Galactic, and Habitat, each offering a diverse range of cannabis products catering to different tastes, potency levels, and price points. This diverse operational footprint highlights C3's aggressive yet strategic expansion, demonstrating its capability to scale operations while adapting to varying state laws and market conditions.

Iced Out Genetics Expands Mail Order Service to All 50 States

Published 2 weeks ago Business & Industry
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Iced Out Genetics, a Michigan-based virtual dispensary, has expanded its operations to provide mail order cannabis services across all 50 states. This development follows a pivotal decision recognizing the medical benefits of cannabis, marking a considerable progression in the industry. The company boasts an expansive catalog of over 900 premium cannabis strains, catering to a broad audience.

The expansion into nationwide shipping is a direct response to the increasing trend of cannabis legalization in various states. A spokesperson from Iced Out Genetics shared their perspective on the change, stating, "Previously, our products were limited to states where cannabis was legally available. However, with the evolving legal landscape, there is now a significant opportunity for growth in the mail order sector of our industry. As we approach potential federal legalization, we are ready to serve the expanding market, which is projected to reach substantial financial milestones annually."

Iced Out Genetics distinguishes itself as the sole mail order cannabis provider that offers same-day shipping throughout the country. Their service is particularly vital for residents in rural areas, where access to cannabis can be limited. The company's online platform, icedoutgenetics.com, provides a convenient solution for customers to purchase cannabis, including seeds and flowers.

In an effort to simplify the purchase process and enhance accessibility, Iced Out Genetics has removed the requirement for medical identification for its customers. This move is part of the company's commitment to ensuring that high-quality cannabis products are accessible to a wider customer base.