Why 'Speed Is Essential' in the Michigan Cannabis Market

Departments - The Last Word

Vertically integrated Lume Cannabis Co. launched more than a dozen stores in 2020 and plans to double that this year, in addition to expanding its growing operations, with a goal of being the No. 1 brand in Michigan.

March 4, 2021

Doug Hellyar, president and chief operating officer, Lume Cannabis Co.
Photo courtesy of Lume Cannabis Co.

In April 2019, Lume Cannabis Co.’s 50,000 sq. ft. cultivation facility in Evart, Mich., came online. In less than two years, the company, founded by a group of Michiganders, has launched 15 stores across the state. When founder and CEO Dave Morrow, who started Warrior Sports in 1992, asked his Warrior colleague and friend Doug Hellyar if he wanted to join him in his new endeavor, Hellyar said it was a “once in a lifetime opportunity.” “It’s the birth of a new industry, and that happens very rarely, so to be a part of that … and build something from scratch is always exciting,” says Hellyar, president and chief operating officer.

Since its launch, Lume has been rapidly expanding, despite the challenges of the COVID-19 pandemic, and soon will unveil its new 85,000 sq. ft. cultivation expansion. Two more 85,000 sq. ft. additions are planned in the future to meet the demands of the expanding Michigan market. Cannabis Business Times spoke to Hellyar to find out what’s next for the burgeoning business.

Michelle Simakis: You have 15 dispensaries listed as “coming soon” on your website, in addition to the 15 already open. What is the timeline for that expansion?

Doug Hellyar: The goal is to be well north of 30 stores by the end of the year. We opened one store every five weeks last year. And the goal was to double that pace. But right now, a lot of that’s going to happen in the second half [of the year]. But if we end up with 35, it’ll be a great year for us.

MS: How did you manage to keep up that pace, especially considering the challenges of COVID-19?

DH: We’re classified as an essential business, so we were able to keep the stores open. We had to transition immediately when we had to close the stores and only sell curbside and delivery. That was a big shift, but fortunately, we were able to stay open, and that’s how we were able to fund the ongoing expansion. It was a several months delay, but then we were able to pick up the pace again in the second half.

MS: What is the strategy behind that fast approach? Are there plans to expand outside of the state?

DH: Our goal is to be the No. 1 brand in Michigan. And we felt speed is essential to that. If a municipality is opting in, we are going to apply, and wherever we apply and we win, we’re going open a store. So that was basically the strategy. And we have a team that’s dedicated to simply the application process and the acquisition of real estate, completing the very comprehensive applications. That’s why we’ve been moving so fast and been successful, and we’ve been able to fund it because of the acceptance of our brand and the success of our stores and the support of the customers. Currently the focus continues to be on Michigan. We are committed to serving every citizen in every corner of the state.

MS: There are still many municipalities that did not opt into cannabis sales in Michigan. How did you navigate that barrier to expansion?

DH: It has been a problem in certain parts of the state. For example, the greater Detroit area, they’ve been slower to opt in than many other parts of the state. What we’re seeing, though, is a trend towards more opting in over time. Concerns about crime escalating when cannabis stores open up in town, those are dissipating because where we do operate, they’re seeing it’s having a positive impact on the community. People are coming into town, they’re spending their dollars elsewhere, too. I think more communities are going to opt in, particularly as businesses continue to be restricted in how they can be open. This is another revenue opportunity for the municipalities.

This interview has been edited for length and clarity. Michelle Simakis is editor of Cannabis Business Times.