Industry leaders say there’s not enough marijuana because it takes at least four months to grow, and state regulatory agents didn’t license growers first. (Shutterstock image)
Michigan’s first recreational marijuana sales will begin next week.
As of now, Ann Arbor will be the only city in Michigan with a licensed recreational marijuana shop. The number of legal recreational marijuana facilities could grow to a dozen by the time licensed sales start Dec. 1, but most cities are still months away from allowing sales.
“This isn’t going to be a flip of the switch where everybody’s going to be able to” sell recreational marijuana on day one, said David Harns, spokesman for the Marijuana Regulatory Agency (MRA).
As state regulators begin what they call a “slow rollout” of the recreational marijuana market, industry leaders say a shortage of cannabis could leave medical marijuana patients with fewer options and increase prices of recreational pot.
Experts say it likely will be another year before facilities are up and running and supply has balanced out with demand.
“It’s going to be a long time… before you get a system where it’s fairly convenient for people who want to go to a nearby store and buy product,” said Doug Mains, a partner at Honigman law firm who specializes in Michigan marijuana policy and regulation.
Michigan’s marijuana dry spell
Cannabis industry members have complained about a medical marijuana shortage for months.Industry leaders say there’s not enough marijuana because it takes at least four months to grow, and state regulatory agents didn’t license growers first. Instead, they approved licenses on a first-come, first-served basis for all pot services, such as transporters and testers.
The shortage has driven up prices, said Robin Schneider, executive director of the Michigan Cannabis Industry Association (MCIA).
“The prices have been upwards of $4,000 per pound,” she said. “Which is incredibly high, when you look at the rest of the country.
It’s just because the demand is so high.”
In Colorado, for instance, marijuana is selling for $1,000 per pound.
Regulators have tried to remedy the shortage by allowing registered caregivers — who have been allowed to grow marijuana for up to five patients since 2008 — to sell to dispensaries. Their product still comprises more than 70 percent of medical dispensary offerings, the Detroit Free Press reported.
The limited amount of marijuana soon will supply both medical and recreational dispensaries – prompting worries among medicinal users that there won’t be enough for them.
State rules allow marijuana businesses to sell half of their product to recreational users if it has been sitting on their shelves for at least 30 days. The policy was created to help the market begin to get off the ground, while making use of existing product, said Harns of MRA.
“Obviously, patients aren’t interested in purchasing that for medical use, so let’s move that over into the adult-use side,” he said.
“Instead of people buying things off the street or through unregulated areas, they’re able to buy them from the state-tested system.”
Instead, some businesses appear to be buying more marijuana and stockpiling it in anticipation of recreational sales.
“We received the largest orders the company ever had on the medical side” the day after the new rule came out, said Omar Hishmeh, CEO of Exclusive Brands of Ann Arbor. The company holds three of the five recreational marijuana licenses awarded last week, allowing it to sell, process and grow pot.
For medical users, the situation means a limited supply could push them to buy on the black market, Schneider said, while recreational users could face higher prices and fewer products.
That may change in the coming week, when MRA expects to award a few more licenses.
“I’m hoping more than just us have the same opportunity Dec. 1,” said Hishmeh of Exclusive Brands. “We can’t take on all of Michigan’s recreational market all on our own — we’re only one store, God bless us.”
Don’t expect a flood of new stores popping up on your street corner: Despite voters approving the adult-use marijuana law last year with about 56 percent of the vote, more than 1,400 of the state’s nearly 1,800 communities have voted to bar recreational marijuana facilities in their communities.
And many communities that allow pot businesses are doing so on a small scale as they work through licensing and application issues.
Lansing, for instance, is allowing pot businesses but has placed a cap on the numbers of growers, dispensaries and microbusinesses.
The city hasn’t yet started accepting applications for those coveted spots, which further delays local dispensaries opening their doors to adult-use customers.
Mains, the marijuana attorney, said many smaller communities are watching how bigger cities like Lansing handle licensing “before really making a decision.”
Others, like the city of Detroit, have opted out altogether for the short term while officials consider how to shape local ordinances.
“There’s always learning and growing inside a new industry like this,” said Harns.
Regulators have tried to remedy the shortage by allowing registered caregivers — who have been allowed to grow marijuana for up to five patients since 2008 — to sell to dispensaries. Their product still comprises more than 70 percent of medical dispensary offerings, the Detroit Free Press reported.
The limited amount of marijuana soon will supply both medical and recreational dispensaries – prompting worries among medicinal users that there won’t be enough for them.
State rules allow marijuana businesses to sell half of their product to recreational users if it has been sitting on their shelves for at least 30 days. The policy was created to help the market begin to get off the ground, while making use of existing product, said Harns of MRA.
“Obviously, patients aren’t interested in purchasing that for medical use, so let’s move that over into the adult-use side,” he said.
“Instead of people buying things off the street or through unregulated areas, they’re able to buy them from the state-tested system.”
Instead, some businesses appear to be buying more marijuana and stockpiling it in anticipation of recreational sales.
“We received the largest orders the company ever had on the medical side” the day after the new rule came out, said Omar Hishmeh, CEO of Exclusive Brands of Ann Arbor. The company holds three of the five recreational marijuana licenses awarded last week, allowing it to sell, process and grow pot.
For medical users, the situation means a limited supply could push them to buy on the black market, Schneider said, while recreational users could face higher prices and fewer products.
Most cities aren’t ready for recreational shops
Ann Arbor is currently the only city with a dispensary that will be able to open its doors to recreational users on Dec. 1.That may change in the coming week, when MRA expects to award a few more licenses.
“I’m hoping more than just us have the same opportunity Dec. 1,” said Hishmeh of Exclusive Brands. “We can’t take on all of Michigan’s recreational market all on our own — we’re only one store, God bless us.”
Don’t expect a flood of new stores popping up on your street corner: Despite voters approving the adult-use marijuana law last year with about 56 percent of the vote, more than 1,400 of the state’s nearly 1,800 communities have voted to bar recreational marijuana facilities in their communities.
And many communities that allow pot businesses are doing so on a small scale as they work through licensing and application issues.
Lansing, for instance, is allowing pot businesses but has placed a cap on the numbers of growers, dispensaries and microbusinesses.
The city hasn’t yet started accepting applications for those coveted spots, which further delays local dispensaries opening their doors to adult-use customers.
Mains, the marijuana attorney, said many smaller communities are watching how bigger cities like Lansing handle licensing “before really making a decision.”
Others, like the city of Detroit, have opted out altogether for the short term while officials consider how to shape local ordinances.
“There’s always learning and growing inside a new industry like this,” said Harns.
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