House of Dank is set to open its latest recreational cannabis retail store on June 14th in Kalamazoo. The new store, located at 1986 S Sprinkle Rd, MI 48906, will operate daily from 9 am to 10 pm, welcoming adults 21 and over with a valid photo ID.
This new location marks the eleventh addition to House of Dank's expanding network of cannabis retail stores in Michigan. The store will offer both in-store and online shopping options, featuring a secure, well-lit parking area, an ATM, and plans to introduce a delivery service soon.
Customers can expect excellent customer service, knowledgeable staff, a welcoming environment, competitive pricing, and the popular Clubhouse Rewards program that House of Dank's other locations are known for. The Kalamazoo store will carry products from well-regarded industry brands such as North Coast, Pressure Pack, STIIIZY, Mitten Extracts, and more. Additionally, House of Dank's exclusive CBD line and apparel collections will be available for purchase both in-store and online.
Marvin Jamo, the owner, shared his appreciation for the company's journey, stating, "We're really proud of where we started and how far we've come in the last nine years. Expanding into new markets allows us to provide every Michigan customer with a more personalized and better shopping experience."
In addition to the Kalamazoo opening, House of Dank is preparing to launch another store in Ann Arbor in the coming months.
California has long been heralded as the largest legal cannabis market globally, with Governor Gavin Newsom reinforcing this claim as recently as the past two months. However, recent data suggests that Michigan has now surpassed California in legal cannabis sales volume, challenging the Golden State's longstanding dominance.
According to BDSA, a cannabis analytics firm, Michigan sold 22 million cannabis products in March, edging out California, which sold 21.3 million products. This data is significant as it marks the first time another state has outsold California in terms of unit sales. The firm's analysis relies on point-of-sale data from both states, though the exact timing of Michigan's market overtaking remains unclear.
Despite Michigan's lead in unit sales, California still leads in revenue. California's cannabis sales reached $1 billion in the first quarter of 2024, compared to Michigan's $786 million. The revenue disparity is largely due to Michigan's lower cannabis prices, making legal cannabis more accessible and affordable than in California.
The discrepancy between unit sales and revenue highlights differing market dynamics. Michigan's success in outselling California by units, despite having a smaller population, underscores significant challenges within California's cannabis market. According to Hirsh Jain, a cannabis consultant, California has failed to capitalize on its market potential, resulting in a robust illicit market that undermines legal sales.
Jain attributes California's struggles to high taxes and stringent regulations that inflate legal cannabis prices. Conversely, Michigan's approach includes low cannabis taxes and stringent enforcement against illegal sales, driving consumers to the legal market. This policy environment ensures affordability and convenience, key factors in Michigan's market success.
Moreover, Michigan benefits from neighboring states lacking legal recreational cannabis sales, attracting out-of-state customers. While this cross-border shopping contributes modestly to Michigan's sales, Jain estimates it accounts for only 5% to 10% of the state's total cannabis sales.
California's legal market continues to grapple with challenges. High taxes and regulatory costs push prices up, while insufficient enforcement against illegal operations allows untaxed, cheaper cannabis to thrive. Consequently, California has seen a decline in expected tax revenues from cannabis legalization, with the first quarter of 2024 recording the lowest legal sales in nearly four years. This decline impacts business sustainability and reduces government funding from cannabis taxes.
In contrast, Michigan's strategic approach, characterized by low taxation and strong enforcement, has created a flourishing legal market. The state's cannabis products are affordable for a broad demographic, driving robust legal sales.
The contrasting cannabis market landscapes between California and Michigan highlight differing regulatory approaches and market outcomes. Michigan's recent surge in cannabis sales volume reflects effective market strategies and poses critical lessons for other states aiming to balance regulation, taxation, and market health.
On Tuesday night, the New Buffalo Township Planning Commission granted preliminary approval to four cannabis dispensary applications, marking the first step in a multi-stage approval process for these businesses.
This decision follows a one-year moratorium on new cannabis applications, which concluded with a surge of submissions just before Monday's deadline. Michelle Hannon, New Buffalo Township Clerk, emphasized that these approvals are preliminary and that the dispensaries must undergo additional scrutiny from various governmental entities before returning to the township board for final approval.
The commission's recommendation to approve the four dispensaries came after a public hearing and review. However, the journey for these businesses is far from complete. "They have to go through approval with various different government entities, and then they'll come back to the township board for final approval once those things are complete," Hannon explained.
In total, 47 applications were submitted and will be reviewed by the planning commission. The influx of applications has sparked concern among some community members. Cathy Ward, a local resident, voiced her worries about the township's priorities. "I wish they would put more money into the children's future in the schools and the childcare available in the area and look into providing some places like a CVS or somewhere to shop," she said.
Despite these concerns, officials note that not all 47 applications are guaranteed to move forward. The township stands to gain approximately $59,000 in annual tax revenue for each dispensary that successfully opens.
Hannon pointed out the uncertainty in the process, stating, "Well, it depends. Just because they have preliminary approval does not mean they have final approval. I mean, of those 47 applications, not even all have gone through this step. Things fall apart; you never know if they all will make it through. It's really hard to estimate at this point."
Agrify (NASDAQ: AGFY), a cannabis technology company, has successfully converted approximately $13.8 million in debt to equity, enabling it to regain compliance with Nasdaq's stock listing rules.
CP Acquisitions, an entity under the control of Agrify's Chair and CEO Raymond Chang, alongside board member I-Tseng Jenny Chan, converted $11.5 million of its senior convertible notes into a prefunded warrant. This warrant is exercisable for up to roughly 8.6 million shares of Agrify's common stock, according to a recent news release.
Additionally, GIC Acquisitions, another entity controlled by Chang, converted $2.29 million of its junior secured notes into a prefunded warrant. This warrant can be exercised for up to about 3.2 million shares of common stock.
These prefunded warrants include adjustment provisions that may be activated if Agrify engages in equity financing within the 12 months following these conversions, pending shareholder approval.
With these conversions, Agrify's shareholder equity will surpass $2.5 million, allowing the company to regain compliance with Nasdaq listing standards. Agrify trades on Nasdaq under the ticker symbol AGFY.
In a statement, CEO Raymond Chang remarked, "The decision to convert a substantial portion of the senior debt demonstrates the management and shareholders' commitment to the future of Agrify."
Earlier this week, Agrify announced the cancellation of its plan to acquire the ag-tech firm Nature's Miracle (NASDAQ: NMHI), citing "unfavorable conditions."
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On Wednesday, the ReLeaf Center officially joined the Dowagiac business community with a unique ribbon tying ceremony. This event, held at 29402 Amerihost Dr, brought together Chamber of Commerce representatives and local business owners to celebrate the occasion. The ribbon tying, in contrast to the traditional ribbon-cutting, symbolized the unity between the business and the community.
The ReLeaf Center, which also operates a facility in Niles at 1840 Terminal Rd., is involved in the cultivation, processing, and provisioning of cannabis. While the company has several locations in eastern Michigan, the Niles site was the first to grow cannabis plants, which are then processed and distributed to other ReLeaf locations. The Dowagiac center marks the second provisioning site in the city.
"We help a lot of people and it's just great to see," said General Manager Lisa Frank. "I'm so very happy to be part of all this. It's just been a great experience for me." The ReLeaf Center operates from 9 a.m. to 8 p.m. Monday through Wednesday, 9 a.m. to 9 p.m. Thursday through Saturday, and 9 a.m. to 4 p.m. on Sunday. It also offers a drive-thru service.
Owner Michael E. Gelatke expressed his enthusiasm for the new location, stating, "It means a lot. The cooperation with the city has been great. We've built these in other places and the cooperation isn't always very good, but this town has been great. We're happy to be here."
Cycling Frog and Delta Light are among the brands offering euphoric and relaxing effects through their canned beverages infused with THC, the main psychoactive ingredient of the cannabis plant. These drinks, which are non-alcoholic but capable of inducing a high, are increasingly distributed by alcohol companies from Connecticut to Texas to offset declining alcohol sales.
Unlike federally restricted cannabis products, these THC drinks are legal in many states because they are made with THC derived from hemp. Hemp, a form of the cannabis plant containing less than 0.3% THC, was legalized under the 2018 Farm Bill, which primarily intended to promote hemp for industrial uses. However, beverage makers have exploited this loophole to create psychoactive hemp concentrates.
Charlotte, North Carolina-based Drink Delta offers six varieties of hemp-derived THC drinks and describes the market opportunity as "like finding a loophole in the Matrix." This burgeoning market has attracted traditional alcohol distributors who are lobbying to maintain this legal loophole. This puts them at odds with lawmakers and established cannabis companies, which face strict regulations.
Unlike marijuana-derived THC products, hemp-derived THC products can be shipped interstate, utilize large national banks, accept credit cards, and benefit from tax deductions. Cannabis companies, which sell products like raw flower, edibles, pre-rolled joints, and tinctures, are restricted from these advantages because marijuana remains illegal at the federal level.
While 24 states allow recreational use of marijuana-derived THC, it remains federally illegal, awaiting reclassification. The Justice Department has initiated steps to reclassify marijuana as a less dangerous drug.
Regulators express concerns that poorly labeled hemp-derived drinks could expose consumers, especially children, to unexpected intoxication or unknown toxins. Currently, distributors of these beverages do not require special licenses, allowing them to display these products alongside traditional alcoholic beverages.
Some states are taking action to regulate these drinks. New York has banned drinks with more than 1 milligram of THC per serving since last summer, and Connecticut recently advanced similar legislation. Attorneys general from 20 states and Washington, D.C., are lobbying for explicit federal guidelines allowing states to ban high-potency products.
Joe Grabowski of Sarene Craft Beer Distributors LLC testified against Connecticut's proposed restrictions, arguing that such laws would harm his business, which has seen growth due to hemp-derived products amid declining alcohol sales. He suggested age restrictions, safety testing, and new taxes as better alternatives.
Minnesota serves as a model for regulated hemp-derived THC products, requiring businesses to register with the state and restricting sales to those 21 and older. The state, which only recently legalized recreational marijuana, sees significant demand for hemp-derived products, generating annual sales of about $180 million.
Even established cannabis companies are entering the hemp-derived THC market. Curaleaf Holdings Inc. announced plans to add these drinks to its product lineup, citing them as a "long-term growth driver."
The cooperation between alcohol distributors and the hemp industry is accelerating the availability of these products. In Texas, Bayou City Hemp Co. expanded its reach to over 1,000 stores through a deal with Silver Eagle Houston, a distributor for Anheuser-Busch InBev NV.
However, the U.S. Cannabis Council (USCC) warns against the unregulated market for hemp-derived drinks. In a letter to Congress, USCC Executive Director Edward Conklin cautioned that the lack of regulation could lead to a "Prohibition-era" crisis. The USCC advocates for hemp-derived THC to be regulated similarly to marijuana.
Despite regulatory uncertainties, the support from the alcohol industry is driving confidence in the legal status of hemp beverages. Farmers are preparing for increased demand, with projections showing a significant increase in hemp acreage dedicated to consumption.
"Once alcohol starts getting involved and starts pushing their lobbying dollars against the other side, there's no way you beat that," said Drink Delta's CEO Jack Sherrie.
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