With the passing of Proposal 1, Michigan has become the Midwest’s first state to allow recreational use of marijuana for adults. This is a boon for marijuana businesses of all sizes. The new law is designed to make Michigan a nationwide leader when it comes to smart-adult-use marijuana laws. Plus, Proposal 1 can add much-needed tax revenue to cash-strapped cities like Detroit. Michigan can grant people six different types of licenses for marijuana businesses. They can get licenses to be cultivators, processors, secure transporters, testing facilities, retail stores as well as microbusinesses.e state.
Sharing The Wealth
Granting licenses to microbusinesses is Michigan’s attempt to share the wealth marijuana sales is anticipated to generate. While big businesses with deep pockets have the money to put the infrastructure in place to become cultivators, testing facilities, processors, retail stores and secure transporters, the average person can still make some money with microbusinesses. It’s a visionary move. In California and other states, the rich dominated the legal marijuana industry. Michigan, with its microbusiness licenses, has made it possible for the average person to make money.
Similar To Microbreweries
Many see the marijuana microbusiness model as being similar to microbreweries. Small businesses owners will be able to grow, produce and sell a limited amount of marijuana products. The idea is each microbusiness will put their unique twist on the product delivery model that will help them to withstand big business from crushing them by flooding the market with lower cost marijuana products. Marijuana microbusinesses can make money by creating Amsterdam-like small tea houses or delivering their specialty product directly to their customers throughout the state.
Big Businesses Making Big Money
As has happened in other states where marijuana cultivation and sales has been legalized, big business interests with deep pockets stand to make the most money. They have the resources to purchase large swaths of real estate to grow, process and produce marijuana products on an industrial scale. They also have the funds to establish a network of shops and a fleet of vehicles to deliver the marijuana products to them. This will enable them to serve the mass market and rake in the big bucks. It is the standard business model that allows the rich to dominate many industries.
The Michigan marijuana model is designed so that everyone benefits. Consumers of both medicinal and recreational marijuana products will have easy access to the products they want and need at lower prices. They can choose to get the products from statewide mass producers or local microbusinesses. The small businesses can carve out a niche market and generate a good income from their marijuana products. They also have the potential for growth. Big business will have the opportunity to get a significant return on their investment and state, city and local governments will benefit from the increased tax revenue.
Benefitting From Others’ Experiences
Michigan is in a unique position. Being the only Midwestern state to legalize marijuana enables them to make money of consumers in neighboring states. Plus, because other states across the country have tried several different models for handling the growth, production and sale of marijuana and marijuana derived products, they have been able to see what works best and incorporate it into their system. This will help Michigan save money by avoiding the pitfalls other states stumbled into when they legalized marijuana. Michigan can now roll out a more streamlined process for profiting from marijuana sales.
Many Benefits For Local Communities
Statewide legalization in Michigan can offer significant benefits to many communities. Local law enforcement agencies will no longer see their jails and court systems clogged with people facing petty marijuana possession charges. Many jobs will be created as entrepreneurs purchase and renovate properties to create growing, processing or distribution locations or microbusinesses. This will transform many rundown properties that were eyesores into attractive, revenue generating businesses. Plus, the increased tax revenue will help to fill the coffers of local governments and give them more money to spend on needed services.
A Gradual Process
The changes in the Michigan marijuana laws will not go into effect right away. It will take several months for the results of the Proposal 1 vote to be certified. Plus, there are local and statewide organizations that must be put in place to manage the process of issuing licenses and ensuring they are being used properly. There are also likely to be tweaks made to the new marijuana laws as communities encounter the challenges involved in implementing them. Conservative estimates are it will take between 6 and 12 months before the changes begin to go into effect. And it will be significantly longer than that before the new laws are fully implemented.
The Michigan Regulation and Taxation of Marihuana Act
This newly passed act is designed to decriminalize marijuana sale and use for people over 21 years of age. The ultimate goal is for the state of Michigan to regulate marijuana the same way it does alcohol. The change is the result of the efforts of a large coalition of local, state and national groups. One of the leading forces was the Marijuana Policy Project. They have also helped to coordinate successful efforts to change the way marijuana sale and use is regulated in Alaska, California, Colorado, Maine, Massachusetts and Nevada. The coalition can also help the state by providing guidance with overcoming the hurdles they are sure to encounter during implementation.
A Logical Starting Point
Michigan’s marijuana microbusiness regulations are similar to the systems being used in both California and Nevada. Drawing on the experiences of those states is a logical starting point for Michigan to anticipate how their microbusinesses should be licensed and regulated. This will make the process faster and easier for the team in Michigan and they will know what to expect and try to avoid. In California, smaller businesses were swallowed up or driven out of business by larger businesses during the implementation process. To avoid this happening in Michigan, the state has put several restrictions in place.
Recently published analysis shows that in California, about 20% of the cultivation licenses were gobbled up by a dozen large licensees. To prevent this happening in Michigan, a number of safeguards were written into the law governing the recreational cannabis market. They ensure Michigan’s microbusinesses and small cultivators will always have a viable avenue to participate in the newly created legal marijuana economy. Tight controls over to whom Michigan’s six classes of licenses for marijuana businesses are issued are designed to ensure microbusinesses remain in the hands of small business owners.
Defining The Microbusiness
In Michigan, a microbusiness is an entity that can cultivate, process, package and sell a maximum of 150 marijuana plants directly to consumers. However, microbusinesses are restricted from selling marijuana or marijuana products to other companies. This is to prevent microbusinesses from essentially becoming subsidiaries of bigger businesses. Entities that have a license to operate a microbusiness cannot have any other type of recreational marijuana license. Their operations must be consolidated under one roof. This ensures opportunities will continue to exist for small business owners.
While marijuana microbusinesses can legally control the entire process from seed to sale, they still face hurdles related to zoning as well as gaining municipal approval. Plus, public companies cannot sell their products in the medicinal marijuana market. While barriers to prevent big business from dominating the recreational marijuana market in Michigan are in place, there is still some concern about them manipulating legislators and governmental agencies to change the rules to their advantage. However, several watchdog groups are on the lookout for such actions.
Restrictions On On-Site Consumption
For marijuana microbusinesses, the issue of on-site consumption of marijuana products could present a significant hurdle. Public consumption of marijuana products is still illegal. In California, they created a workaround to this problem by allowing cities and counties let people consume marijuana products on-site if the area where marijuana products are consumed isn’t visible to the public, only customers over age 21 are allowed access and no tobacco or alcohol are sold or consumed on the premises. Michigan has adopted similar workarounds to deal with the restrictions on on-site marijuana consumption through section 4.1(e) of their new marijuana law.
A Potential Economic Boon
People all over Michigan see the new marijuana law as having the potential to create an economic boon for large and small communities statewide. By learning from the experience of California, Colorado, Nevada and other states that recently legalized recreational use of marijuana, they are taking steps to ensure both large, deep-pocketed businesses and small ‘mom and pop’ type microbusinesses can enjoy the economic benefits of legalized marijuana sales.
Much-Needed Influx Of Money
In a region where the dramatic downturn in the automotive industry has left millions of people struggling financially, Michigan’s legalization of recreational marijuana sale and use can provide a much needed influx of a large amount of money for people in communities throughout the state.
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If you are considering entering the Michigan commercial marijuana industry contact us, we’ve done all the homework to ensure a quick launch for your start-up.