Traverse City has reached the one-year milestone since the introduction of recreational cannabis sales, an event that was highly anticipated and, according to local stakeholders, well worth the wait. While many Michigan cities quickly launched recreational cannabis operations following the state's legalization in 2018, Traverse City took a more cautious approach, deliberating extensively on the best practices for implementation. The city's dispensaries only began selling recreational cannabis in March 2023.
The city manager of Traverse City, Liz Vogel, reported a significant financial boost from the state in the form of approximately $709,000, allocated from a 10 percent excise tax on statewide recreational cannabis sales. This payment, which equates to about $59,000 for each of the twelve active dispensaries in the city, will be an annual benefit. Currently, with no designated use for these funds, the city enjoys considerable flexibility in future spending.
The city initially granted 16 dispensary licenses, though several are still in the development stages. The decision on how to use the additional revenue will ultimately lie with the city commission. Discussions have ranged from enhancing local police resources to potentially earmarking funds for specific community projects, though no formal decisions have been made by the newly elected commission.
For local dispensaries, the introduction of recreational sales has been transformative. Justin Elias, president and co-founder of PUFF Cannabis, noted that while the delay in approving recreational sales impacted their finances, the new revenue stream has been robust, multiplying their income compared to medical-only sales. Elias emphasized the economic relief the new market has provided, helping to recoup losses from previous years.
Recreational sales have not only benefited established businesses but have also attracted tourists, further boosting the local economy. Traverse City, known for its picturesque setting and vibrant tourist industry, now offers another attraction for visitors who can easily purchase cannabis recreationally.
Local businesses have seen a positive response from both tourists and residents. Michael Thue, managing partner at Verts Neighborhood Dispensary, highlighted the enthusiasm from customers, particularly those visiting the city. His business focuses on locally sourced products, enhancing its appeal by supporting the regional cannabis industry.
Despite the success, some challenges remain. The market might face a potential contraction as competition intensifies. Both Elias and Thue predict a reduction in the number of operating dispensaries over time, suggesting that those with superior customer service and high-quality products are more likely to endure.
As Traverse City navigates the evolving landscape of recreational cannabis, stakeholders remain optimistic yet realistic about the challenges and opportunities ahead. The city and its cannabis businesses continue to adapt, aiming to sustain growth and support from the community.
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