Opened in February, the store in Pinconning offers cannabis flower, vapes, and edibles produced just 300 yards away at Pincanna's 135,000-square-foot cultivation facility. The products are sold at wholesale prices, with premium flower brand Head Stash Harvest retailing for $12 an eighth at the Pinconning location, compared to $20 at Pincanna's East Lansing store.
Founder and owner Robert Nusbaum explains the strategy behind the store's rural location.
"It's in the middle of nowhere, but it's a gateway to Up North," Nusbaum said. "We're doing this to benefit ourselves and our wholesale partners. When they stop in, they can stock up on our product for much cheaper and decide whether they like it. If they do, they can seek out our goods at one of our stores downstate or another store that sells our goods."
Nusbaum's background in retail, stemming from his family's success with New York Carpet World, has influenced Pincanna's approach. This customer-focused strategy has propelled Pincanna to become one of Michigan's largest cannabis cultivators. Despite Nusbaum's lack of experience in cannabis cultivation, he has assembled a team of experienced growers and processors, many of whom previously operated in the black market.
Among them is Ju Juan Coleman, known in the cannabis community as "Funk." Coleman has been making cannabis edibles for over 20 years, initially from his home kitchen in Detroit to treat his sickle cell anemia. Today, under the Funky Extracts brand, Coleman produces 400,000 infused edibles a month from Pincanna's state-of-the-art commercial kitchen.
Coleman's journey is mirrored by Vince Volovlek, who transitioned from opioids to cannabis following a severe ATV accident. Volovlek founded Michigan Organic Rub in 2013, creating balms containing THC to alleviate pain and inflammation. Nusbaum acquired Michigan Organic Rub in 2019 and promoted Volovlek to director of processing.
Nusbaum's philosophy is to harness the expertise of those passionate about cannabis while guiding them through the business aspects. He frequently visits the Pinconning facility to engage with staff and oversee operations.
"This is a relationship business we're building," Nusbaum said, emphasizing the importance of teamwork and collaboration.
Pincanna's innovative approach extends to its hiring practices, promoting talent from within based on potential and creativity. For example, a packaging department worker was promoted to head of packaging design after his doodles were noticed by Nusbaum.
However, balancing passion and profitability can be challenging. Nusbaum acknowledges the difficulties but remains optimistic about the company's direction. Recently, Don Newman, former director of cultivation at High Life Farms, joined Pincanna to enhance their growing operations. Newman has doubled production to 30,000 pounds without expanding the facility by optimizing growing techniques.
"We're producing twice as much as we were a year ago and that's all because of Don," Nusbaum said. "We have better production and our quality has gone through the roof. We've really started something special here."
Pincanna currently operates four retail stores in Pinconning, Kalkaska, East Lansing, and Kalamazoo, with plans to open two more in Mount Pleasant and Saline. Nusbaum aims to expand to 12 stores, allowing Pincanna to sell most of its flower in-house, thus boosting profit margins.
"We want to control our own destiny," Nusbaum said.
While Nusbaum envisions eventually selling the company, he remains dedicated to its growth for the foreseeable future. At 63, he foresees an exit in three to five years but continues to learn from his team of cannabis experts.
Pincanna's journey exemplifies how combining retail expertise with a passion for cannabis can drive success in the burgeoning industry.
Eaton County's first recreational cannabis store, Harbor Farmz Provisioning Center, has experienced a successful start, welcoming thousands of customers since its June 10th opening. Located at 122 Lansing Road, the store has drawn patrons from Charlotte, Olivet, and Bellevue, according to Assistant General Manager Alyssa Murray.
"We've had a very positive response from lots of people," Murray stated, highlighting the broad community interest.
While neighboring areas like Lansing and Ingham County had already embraced recreational cannabis sales and benefited from the accompanying tax revenue, Eaton County had not yet entered the market. This new venture brings anticipated financial benefits to local communities through state revenue.
During the 2023 fiscal year, Michigan collected $87 million in cannabis tax revenue, a significant increase from the $59.5 million collected in 2022. The revenue is distributed among 269 cities, villages, and townships allowing cannabis sales, with each eligible municipality and county receiving $59,000 per licensed retail store and microbusiness.
For example, Lansing, which has 21 cannabis dispensaries, received $1.4 million in tax revenue. Charlotte is also set to gain financially, charging a $5,000 application fee and a $5,000 annual renewal fee for each license. The city allows retail, safety facility, transport, and processing licenses, but excludes grow facility, microbusiness, consumption, or temporary licenses. All cannabis facilities in Charlotte are confined to three zoning areas: Lansing Road near Interstate 69, Clinton Trail near Meijer, and around Lipsey Drive and Packard Highway.
Harbor Farmz is the first of several expected cannabis businesses in Eaton County, with Hollywood Jacks and High Society Cannabis also in the process of setting up shop in Charlotte. According to City Clerk Mary LaRocque, these businesses are at various stages of the application process.
Charlotte's City Council approved the recreational cannabis ordinance on August 21st, 2023, by a 6-1 vote. The ordinance, which took effect in October, does not cap the number of dispensaries. Councilman Mike Duweck, who initially had reservations about recreational cannabis, supported the ordinance after recognizing potential benefits like property redevelopment, tax revenue, and job creation.
The Harbor Farmz site was previously a veterinary hospital, while Hollywood Jacks plans to repurpose a former Mexican restaurant. Duweck emphasized that the early entrants into the market are likely to succeed. Conversely, Councilman Anthony Rodriguez, the sole opposing vote, had concerns about crime statistics and dispensary locations but has since acknowledged the benefits and community support for the store.
Kathy McCoy, a Charlotte resident, expressed support for the new dispensaries, appreciating the repurposing of unused properties. "What's the harm?" she remarked.
Harbor Farmz, established in 2017, opened its first location in Three Rivers in 2022, where it was also the pioneering dispensary. For the Charlotte store, the company prioritized hiring local residents. Murray, a long-time Charlotte resident, emphasized the importance of a positive first impression. "It's an experience they're buying into," she said.
Customer Floyd Harkness, who uses cannabis for chronic pain, praised the knowledgeable service he received at Harbor Farmz. "They are knowledgeable. I was impressed with their knowledge the other day when I came, so that's what brought me back," he commented.
Verano Holdings Corp., a prominent multi-state cannabis company, is expanding its innovative Cabbage Club membership program to Michigan, Connecticut, and Maryland. Cabbage Club, a pioneering cannabis membership club in the U.S., offers a variety of exclusive benefits to its members, including monthly store credits, merchandise, early access to product releases, line-skipping privileges, special event access, and concierge services.
The expansion to Michigan marks a significant development in Verano's efforts to provide unique, value-added experiences for cannabis consumers. Initially launched in Illinois and New Jersey, the Cabbage Club will now be available at Zen Leaf dispensaries, including one in Michigan. This expansion covers five states, with plans for further growth across Verano's 142 dispensaries in 13 states.
Cabbage Club members can enjoy numerous perks, such as:
Cabbage Club offers two main membership tiers:
Additionally, there is the Silver Dollar Club, an exclusive tier available by invitation, which offers secret perks beyond those provided by the Dime and Quarter memberships.
Starting July 1st, individuals can join Cabbage Club as Founding Members at a discounted rate by visiting earlyaccess.cabbageclub.co. This limited-time offer allows new members to enjoy the extensive benefits of the club at a reduced cost.
Verano's Chief Marketing Officer, David Spreckman, emphasized the success and future potential of Cabbage Club, stating, "After exceeding expectations in Illinois and New Jersey, introducing Cabbage Club to new consumers in leading cannabis markets underscores our mission to provide a unique shopping and community experience. We look forward to expanding the Cabbage Club community across our Zen Leaf and MÜV dispensaries."
Last weekend, glass enthusiasts from across Michigan convened in Detroit for the Michigan Glass Project, a festival celebrating the state's rich glassmaking culture, which has a strong connection to the cannabis community. Although I couldn't attend this year, the event sparked nostalgia for the head shops of the past.
Before the legalization of medical and recreational cannabis, finding quality bongs and pipes was a challenge. Options were limited to a few sketchy gas stations offering a small selection of foreign-made, mass-produced bowls and plastic bongs. For higher-quality pieces, one had to venture to head shops like In Flight Sports, Su Casa Boutique, or Krazy Katz, all of which have since closed.
You might wonder why these longstanding head shops have closed despite the growing acceptance and use of cannabis. The answer lies in the influx of wealthy investors into the cannabis accessory market, mirroring the broader trends in the cannabis industry. Legalization has rapidly changed laws and attitudes, attracting large-scale operators to a market once dominated by small, local businesses.
In the not-so-distant past, selling bongs could lead to jail time. Cannabis pioneer Tommy Chong was infamously imprisoned for selling bongs and other cannabis accessories online just two decades ago. Back then, the accessory market was fraught with risks that deterred deep-pocketed businesses. Local head shops, often run by cannabis enthusiasts, were among the few places where accessories could be purchased, with products labeled as "novelties" or "for tobacco use only" to avoid legal trouble.
As the legal cannabis market expanded, the risks diminished, and the technology and delivery methods for both cannabis and tobacco evolved significantly. The rise of vaping transformed the landscape, with consumers shifting from cigarettes to vapes, leading to a surge in vape shops that soon began stocking cannabis accessories. Chains like Wild Bill's have proliferated across the state, bolstered by the increasing popularity of vaping and cannabis. Simultaneously, cannabis dispensaries have emerged, also selling accessories and glass.
This shift has made it difficult to find locally made glass unless you connect with artists directly through social media. Corporate chains and large cannabis dispensaries have largely replaced mom-and-pop shops. Before legalization, a vibrant community existed around cannabis, with local glass artists showcased in head shops, fostering a sense of pride in owning high-quality, locally-made glass. These shops also played a crucial role in educating consumers about good glass quality and functionality. Today, much of this knowledge and passion has been lost.
This trend is not unique to Lansing. In Grand Rapids, only two mom-and-pop head shops that existed before legalization remain. The growth of the cannabis industry has pushed local operators out of the accessory market. It's a significant loss, and consumers are encouraged to support local shops when purchasing glass. In the Lansing area, options are limited but include Level Up Smoke Shop in Frandor and La Casa Del Rew in Old Town. These shops often offer products at comparable prices to mass-produced glass, supporting individuals who have long been valuable resources to the cannabis community.
Molly MacDonald, CEO of Southfield-based The Pink Fund, which offers financial assistance for nonmedical bills to breast cancer patients, appreciates the recent $50,000 donation from a local cannabis business, even though she's not familiar with the intricate federal regulations governing cannabis.
"We take financial donations from almost everyone," said MacDonald. Patients supported by The Pink Fund often struggle to pay rent, mortgages, utilities, and car loans due to income loss while undergoing medical treatments.
Non-cannabis companies frequently donate to nonprofits and benefit from tax deductions. However, the cannabis industry, which is legally obligated to meet social equity requirements, often donates without expecting such tax benefits. Josey Scoggin, executive director of the Great Lakes Expungement Network, highlighted that their group relies heavily on donations from cannabis businesses. She noted that 88% of their donors do not request receipts, aware that their contributions are not tax-deductible.
Cannabis companies navigate complex federal laws, which still classify cannabis sales and use as illegal. The IRS prohibits deductions beyond inventory costs for businesses involved in Schedule I or Schedule II drugs, including cannabis. This rule applies even in states where cannabis is legalized, as federal law under the Controlled Substances Act prevails.
Michigan, which legalized recreational cannabis use in 2018 and medical use in 2008, has seen its cannabis industry flourish. In May 2024, sales of recreational and medical cannabis products reached $279.6 million, a nearly 14% increase from May 2023's $245.9 million.
The U.S. Department of Justice is considering reclassifying cannabis from a Schedule I to a Schedule III drug, which would align it with substances like ketamine and anabolic steroids. This reclassification could open access to traditional banking systems and standard business-tax deductions for cannabis businesses.
Attorney James Allen explained that the Federal Controlled Substances Act currently hinders financial services for the cannabis industry, although legislation such as the SAFE Banking Act aims to change this. While the House has approved the Act, it awaits Senate approval.
Despite the federal restrictions, cannabis-related businesses manage their financial transactions through specialized institutions. The Justice Department focuses on illicit cannabis sales rather than state-approved activities, allowing some level of banking for the industry.
Cannabis business owners like Jerry Millen of The Greenhouse of Walled Lake advocate for national legalization to access standard banking services and reduce financial complexities. Millen employs a certified professional accountant specialized in cannabis and incurs high banking fees due to the intricate regulations.
Paul Tylenda, an attorney for cannabis businesses since 2019, noted that early cannabis companies in Michigan relied on specialty credit unions. As the industry grew, some regional banks began offering services, albeit at higher costs due to perceived risks.
Many cannabis companies now operate under larger holding companies that manage non-cannabis activities, allowing them to utilize standard business deductions, including for charitable donations.
Michigan's cannabis industry is awaiting the potential reclassification to Schedule III, which would integrate cannabis businesses into the mainstream economy, allowing for regular business operations and standard charitable contributions.
In October, Puff Cannabis, based in Madison Heights, announced a $50,000 donation from product sales to The Pink Fund and the Chaldean Community Foundation. The Pink Fund received $11,000 from Wana Brands and $40,000 from Oak Canna, partners in the Puff Cannabis donation.
Public comments on the proposed federal marijuana reclassification are open until July 22. More information can be found at the Federal Register's website.
Michigan, known for its natural beauty and rich history, has experienced significant economic shifts over the decades. Surrounded by the largest freshwater lakes globally, Michigan boasts vast forests, sandy beaches, beautiful state parks, pristine inland lakes, and some of the top golf courses in the country. Often referred to as the "Winter, Water Wonderland," Michigan is a top vacation destination featuring historic sites like Mackinac Island, which USA Today recently named the "Best Travel Destination" in the United States for 2024.
After World War II, Michigan epitomized economic prosperity. The state was home to the Big Three automakers – General Motors, Ford, and Chrysler – headquartered in Detroit. The booming auto industry created a prosperous middle class, attracting talent from across the nation and the globe, as people flocked to Michigan in pursuit of the American Dream.
However, the economic landscape has dramatically changed over the years. Starting in the 1980s, General Motors began shedding jobs, and since 1990, employment in auto plants, parts factories, and corporate offices has declined by 35%, according to the Bureau of Labor Statistics. This decline also affected ancillary businesses such as restaurants, hotels, gas stations, and real estate. Edmunds reports that domestic auto sales by GM, Ford, and Stellantis (formerly Fiat Chrysler) have plummeted from nearly 70% of the market in 1999 to 37% last year. Today, more people are employed in Michigan's hospitals than in its auto assembly plants.
Several factors contributed to this decline. Auto executives underestimated foreign competitors, believing American cars would always lead in quality and appeal. Meanwhile, the Auto Workers Union demanded high wages and benefits, driving up manufacturing costs and auto prices. This led to a scenario where foreign automakers could offer better cars at lower prices, ultimately outcompeting American manufacturers.
The decline of the auto industry had devastating effects on Michigan's cities. Flint, once a bustling hub for General Motors, became a ghost town almost overnight when GM closed its operations there. The city's economy was destroyed, and Flint later gained notoriety as "The Murder City." Lansing, Michigan's capital, faced similar devastation when GM shuttered its manufacturing operations there, and other towns across the state experienced comparable fates as production moved to states with lower labor costs and fewer union restrictions.
Despite these challenges, Michigan remains under Democratic leadership, which recently repealed the state's "Right to Work" law. This legislation had allowed Michigan to attract new businesses by not requiring workers to pay union dues. Its repeal could make it more difficult for Michigan to compete for new business opportunities.
Today, Michigan's economy is recognized for a different industry: cannabis. Michigan has surpassed California as the top cannabis market in the U.S. by sales volume, with per capita sales of $132.41, tripling California's $44.21. Market sales reached over $3 billion in 2023 and are projected to hit $4 billion by 2028. However, despite this success, Michigan's cannabis companies face intense competition and struggle to stay afloat in the recreational market.
In summary, Michigan has transitioned from being a global leader in automotive manufacturing to becoming a significant player in the cannabis industry. While the state's economy has seen better days, Michigan continues to adapt and find new avenues for growth and prosperity.
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