Statue of Lady Justice holding scales, symbolizing fairness in Michigan Cannabis 2020 regulations.

Michigan Cannabis Industry Set to Become an Open Market in 2020

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The Michigan cannabis market is about to open its doors more widely in 2020, allowing a new wave of entrepreneurs to join the thriving industry. The Michigan Cannabis Regulatory Agency (CRA) made significant changes to the cannabis license application process, aiming to reduce the illegal cannabis market. On October 6, 2020, the CRA issued an advisory bulletin that revealed its plans to relax eligibility requirements for adult-use cannabis business licenses.

Relaxed Eligibility Requirements Under the Michigan Regulation and Taxation of Marihuana Act

Michigan’s Regulation and Taxation of Marihuana Act (MRTMA) allowed the CRA to start accepting applications for adult-use licenses such as cultivation, dispensary, processing, and transport on November 1, 2019. Initially, these applications were limited to current Medical Marijuana Business license holders and Michigan residents applying for a Microbusiness or Class A Growers license. This was intended to give a preferential advantage to established medical marijuana businesses in Michigan.

However, with the expiration of these requirements in November 2021, the CRA has taken steps to open the market sooner. Beginning March 1, 2021, any applicant, regardless of residency or prior medical marijuana business licenses could apply for adult-use marijuana retail, processing, cultivation, or transport licenses.

Michigan’s Open Market: More Opportunities for Cannabis Entrepreneurs

This move has effectively created an open cannabis market in Michigan. One of the state’s most notable advantages is that there is no cap on the number of cannabis business licenses, making Michigan an appealing market for both seasoned and new cannabis entrepreneurs. The CRA may approve additional licenses as needed to address market demand, reduce the illegal cannabis market, and improve marijuana access in rural areas.

Local Municipalities Join the Licensing Conversation

While the state is relaxing its eligibility requirements, local municipalities can opt in or out of cannabis business licensing. Some cities, like Detroit, Michigan’s largest urban center, are still deliberating on whether to allow recreational sales. Detroit previously prohibited recreational cannabis sales, but with proposed legislation now under review, the city’s stance may soon change. Councilman James Tate voiced the need for equity within Detroit’s cannabis industry, particularly in light of the criminal convictions that affected many families. “The time has come for equity currently not present within Detroit’s cannabis industry,” he stated, according to the Detroit News.

Navigating Increased Competition in the Open Market

As the Michigan cannabis market becomes more competitive, simply applying for a business license will not guarantee success. New applicants will face competition from large multi-state operators (MSOs) and seasoned entrepreneurs. To stand out, applicants must submit a comprehensive business plan, a compliant site location, detailed operating procedures, and accurate financial projections.

Success will require substantial capital and careful planning, especially as Michigan’s cannabis market matures. Producers and suppliers must anticipate increased competition, as demand for cannabis will eventually be met by a greater supply. This shift will likely lead to more competitive pricing and higher-quality products for consumers, benefiting the market as a whole.

Expanding Consumer Offerings and Opportunities

As Michigan’s cannabis industry expands in 2020 and beyond, consumers can expect a broader selection of innovative products with unique formulations. Increased competition will drive businesses to enhance product offerings and service quality, leading to better pricing and more variety for adult-use cannabis consumers.

Michigan’s cannabis sales reached approximately $1 billion in 2020, with experts predicting the market could grow to as much as $3 billion in the coming years, according to Andrew Brisbo, Executive Director of the Michigan Cannabis Regulatory Agency.

Preparing for Success in Michigan’s Cannabis Industry

The changes in Michigan’s cannabis licensing will open new opportunities for entrepreneurs looking to enter the market. However, with the increase in competition, ensuring success will require careful planning and execution. Now is the time to start strategizing and setting up your business for success.

Interested in learning more about Michigan’s cannabis market? Contact Catalyst BC to find out how we can help you scale your operation or launch a new cannabis business in Michigan.

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