Michigan launched adult-use sales on Sunday, Dec. 1, but the small number of licensed retailers limited first-day sales to less than a quarter million dollars.
Three licensed dispensaries, all located in Ann Arbor, generated $221,000 in sales during the state’s first day of recreational cannabis sales, according to the Detroit News, citing the Marijuana Regulatory Agency.
The department of Licensing and Regulatory Affairs (LARA) awarded 18 licenses by opening day, mostly to cultivators and processors. Due to this slow rollout, wholesale prices have remained stable, according to Adam Koh, editorial director for Cannabis Benchmarks, a market research group.
“We haven't really seen any significant wholesale price movement in the lead up to adult-use sales in Michigan so far. That's probably due to the small number of stores licensed right now,” he says. Vertically integrated businesses, Koh adds, “also cut down on wholesale trading taking place as such businesses would just transfer their own product internally.”
Green Peak Industries is one such vertically integrated business ready to jump into the adult-use market. The company announced on Dec. 2 that it received approval on licenses to grow and sell cannabis for recreational use. “With the approvals for both cultivation and processor licenses in Windsor Township, as well as provisioning centers in White Cloud and Ann Arbor, Green Peak Innovations is the first large scale, vertically-integrated, cannabis producer for adult-use in the state of Michigan,” the company said in a press release.
The company's first two retail stores that have been approved for recreational use starting in December are located in Ann Arbor ("Skymint") and White Cloud ("White River Wellness"). The company also has three additional Skymint-branded retail stores operating in Bay City, Newaygo and Nunica (medical-only) and has plans to open an additional four stores over the next eight to ten weeks.
"We are extremely proud to finally begin opening the doors of our premium cannabis retail stores to the everyday recreational consumer," CEO Jeff Radway said in a statement.
The Mint, an Arizona retail chain, also has plans to open locations in Michigan, the company’s first operations outside of its home state. The company plans to open its first site, a 3,500-square foot center, in Kalamazoo. The dispensary will have 16 registers to process high volumes of customers during rush times.
The company also is planning to vertically integrate in Michigan, with a cultivation facility expected to open in 2020. As predicted by Koh, these moves to vertically integrate should keep wholesale prices down in the state.
Despite the rush of companies joining the adult-use market, it is likely that Michigan will experience slower-than-previously-seen growth as 80% of municipalities have opted out of recreational sales, according to a report by USA Today. That said, they can opt in/out in the future depending on how legalization impacts surrounding communities.
Illinois is expected to build on the Midwest’s green rush, with adult-use sales beginning on Jan. 1, 2020.