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MICHIGAN’S RECREATIONAL MARIJUANA SALES TO BEGIN DECEMBER 1ST BUT EXPECT A SLOW ROLL OUT

John W. Fraser

Last November, Michigan voters overwhelmingly adopted a ballot initiative that enacted the Michigan Regulation and Taxation of Marihuana Act (“MRTMA”). MRTMA legalized the possession, use, and cultivation of marijuana for adults age 21 and up in the State of Michigan. MRTMA also created a licensed commercial framework for businesses to grow, process, transport, test, and sell marijuana to adults age 21 and up.

Michigan’s Marijuana Regulatory Agency (“MRA”) began accepting applications for recreational marijuana business licenses on November 1, 2019 and issued the first batch of licenses last week. For the first 2 years, largely, only existing licensed medical marijuana business will be able to apply for recreational marijuana business licenses. This is why the MRA has been able to process these recreational business licenses fairly quickly.

Starting Sunday, December 1, 2019, adults age 21 and up will be able to purchase marijuana from licensed adult-use marijuana retailers. While various media outlets are hyping up the December 1st date, prospective customers should temper their expectations. December 1st is not going to be a “Green Sunday” to fall in between “Black Friday” and “Cyber Monday.” The implementation and rollout of the adult-use recreational marijuana market in Michigan is going to be a slow rollout for 3 reasons.

  1. There is an EXTREMELY limited supply of product that will be available for purchase to the adult-use market. Licensed medical retailers are only able to transition up to 50% of their medical inventory over to the recreational side, and they are only able to transition inventory that has been in their stock for at least 30 days. This practically means that only “older” inventory will be available to transition over.
  1. The supply side of the medical industry is still not fully operational. The medical marijuana industry only serves about 3% of Michigan’s population, and the existing supply chain has not been able to manufacture enough products to meet that market segment. The recreational marijuana market is substantially larger than the medical market, so the supply issues are going to be exacerbated. In other words, the supply is going to decrease while the demand increases.
  1. There are only a limited number of facilities that have received their recreational licenses at this time. That number will grow over time, but the MRA has intended for this to be a limited rollout by design.

So, December 1, 2019 marks an extremely important day for folks in Michigan, but you shouldn’t expect to have convenient access to a wide variety of cannabis products for quite some time. We likely won’t see a fully established supply chain with adequate inventory until sometime in mid to late 2020. As far as “Green Sunday” shopping, if you want to claim fame to being one of the first licensed recreational sales in Michigan, you should plan to get to a licensed retailer early. Supply is going to be limited and is almost certainly going to run out.

If you’re interested in pursuing a cannabis business license in Michigan, contact John Fraser and the Cannabis Law Attorneys at Grewal Law PLLC.

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