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.
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.
In the evolving cannabis industry, Michigan has established itself as a significant player, particularly in the cannabis concentrate market. This rise is marked by the presence of numerous top-performing brands, setting the state apart in a competitive landscape.
In a saturated cannabis market, consumers increasingly seek out premium products with superior quality and unique attributes. Cannabis concentrates have become a favored choice due to their high potency, refined flavors, and sophisticated packaging. According to BDSA data, the popularity of cannabis concentrates has surged, with sales rising significantly. This makes them an attractive option for companies aiming to enhance profit margins.
Michigan has become a hub for several standout cannabis concentrate brands, reflecting strong growth and market performance. Brands such as Goodlyfe Farms, Galactic, and Society C have each surpassed $5 million in sales, demonstrating robust demand and customer loyalty. These brands are not only excelling in the concentrates market but are also making significant strides in other product categories.
While Michigan leads with its top-performing brands, other states also show notable activity in the cannabis concentrate market. Massachusetts, for instance, is home to successful brands like LivWell and Happy Valley, both exhibiting strong sales trends. Additionally, Sauce Essentials, which operates in Massachusetts and other states, has seen sales exceed $1 million, highlighting the cross-state appeal of premium concentrates.
Analyzing the broader market landscape, Headset data provides insights into the performance of various brands across different states:
Several emerging brands are making significant strides in Michigan, underscoring the state's dynamic market growth. Brands such as Distro 10, Mischief, The Limit, and Traphouse Cannabis Co. have all surpassed $1 million in sales, indicating strong market penetration and potential for future growth.
Michigan's prominence in the cannabis concentrate market is evident from the success of its local brands, which continue to outperform in sales and market presence. The state's robust market environment, coupled with consumer demand for high-quality concentrates, positions Michigan as a critical player in the national cannabis industry.
The cannabis industry is expanding in Charlotte, Michigan, as Hollywood Jacks prepares to become the second dispensary to open in Eaton County. This marks a significant development for a community that has long resisted the establishment of cannabis facilities.
Brian Miller, the owner of Hollywood Jacks, is eager to welcome customers to his new dispensary.
"It's absolutely a dream come true," Miller expressed, highlighting his enthusiasm for the business venture.
As Hollywood Jacks gets ready to open, local business owners and residents are sharing their perspectives on this new addition to the community. Isaac Howard, the manager of Domino's, noted an uptick in activity in recent weeks.
"It's been kind of busy lately, it's increased over the past couple weeks," Howard said. "It will probably help the rest of the town get more traffic going."
Eaton County has historically been cautious about allowing recreational cannabis stores, even as such establishments became more common in surrounding areas. City council members have conducted extensive research into the potential impact of these stores on public safety and community welfare.
Mitch Maltz, the store manager at Harbor Farmz, the first cannabis shop to open in Charlotte, shared his positive experience.
"Business has been really good, love the fact we have our own products here," Maltz said.
The arrival of both Harbor Farmz and Hollywood Jacks is expected to bring substantial economic benefits to Charlotte. In Michigan's 2023 fiscal year, each licensed retail store and microbusiness generated over $59,000 for their respective municipalities and counties. Eaton County, which did not receive any of this revenue in the past, is now poised to benefit from this additional income.
Brian Miller extended his gratitude to the community, expressing appreciation for the support he has received.
"I just would like to thank all the community," Miller said.
Rainbow Realty Group IV, LLC, in collaboration with Rainbow Realty Group II, LLC, and MJ Real Estate Investment Trust, has finalized a senior mortgage secured by a newly constructed industrial building in Detroit, Michigan.
The 110,670-square-foot building, situated on 5.49 acres, is operating as a licensed cannabis cultivation facility serving both the recreational and medical markets in Michigan. The borrower acquired the land in 2018, obtained its cannabis license in 2022, and subsequently developed a state-of-the-art facility. Additionally, the borrower holds several retail dispensary licenses throughout Michigan, where its products are expected to be sold.
Ben Bolanos, Rainbow's Chief Operating Officer, expressed enthusiasm about the transaction, stating, "We are thrilled to finalize this mortgage transaction secured by a cutting-edge industrial facility. Equipped with advanced growing technology and equipment, the property positions the borrower to deliver high-quality cannabis products at competitive costs."
This announcement follows the recent news that Michigan's cannabis market has surpassed California's to become the largest in the United States by sales volume as of June 2024. This transaction marks Rainbow's third investment in Michigan, underscoring the firm's strong confidence in the state's robust cannabis market.
For those seeking expert legal assistance in the cannabis industry, Michigan Lawyers Weekly has announced its inaugural list of "Go To Lawyers" specializing in cannabis law. This recognition highlights top attorneys who have demonstrated exceptional knowledge and success in the complex and evolving field of cannabis legislation and regulation.
Navigating the legal landscape of the cannabis industry in Michigan requires specialized knowledge. From understanding state-specific regulations to handling compliance issues and representing clients in court, a skilled cannabis lawyer is essential. Here's what makes a cannabis lawyer indispensable:
Michigan Lawyers Weekly's list of "Go To Lawyers" for cannabis law features the state's top legal experts. These attorneys have made significant contributions to the field and are recognized for their outstanding work:
These attorneys have been recognized for their deep understanding of Michigan's cannabis laws and their ability to navigate the intricacies of the legal system. Their profiles, to be published in the July 29th editions of Michigan Lawyers Weekly, will provide detailed insights into their careers and achievements.
When selecting a cannabis lawyer, consider the following:
For anyone involved in Michigan's cannabis industry, having a knowledgeable and experienced cannabis lawyer is crucial. The "Go To Lawyers" recognized by Michigan Lawyers Weekly represent the best in the field, offering invaluable expertise and support to navigate the complexities of cannabis law.
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