New data from the Cannabis Regulatory Agency (CRA) in Michigan revealed that the state collected more than $3.6 billion in adult-use sales last year. Compared to the $2.3 billion in sales collected in Michigan in 2022, the most recent sales data shows 30% growth.

According to Crain’s Detroit, that amount equates to $305 in cannabis products per person, compared to the $150 per capita in California (with a projected $5.9 billion in cannabis products sold in 2023), and approximately $290 in per capita spending in Colorado.

The CRA also showed an increase in retailers as well, with a total of 750 dispensaries as of December 2023. “As we head into 2024, the CRA continues to focus on transparency and communication, working with stakeholders as the industry continues to grow,” CRA Director Brian Hanna said. “We’re committed to supporting Michigan’s cannabis licensees who currently employ over 35,000 employees, a 23% increase from December 2022.”

Hanna took the position of director after former director Andrew Brisbo departed in September 2022. With a background in law enforcement, Hanna has implemented strict rule enforcement, such as fines for cannabis businesses that didn’t pay their annual fees but also for those who were not tracking and/or handling cannabis products properly. According to MLive.com, this helped curb black market sales and other related activity.

MiCannaPros founder Harry Barash told MLive.com about the methods and results of the CRA. “They’re certainly making a lot of examples, and if you’re doing things that you shouldn’t be doing it’s only a matter of time before the CRA figures it out,” said Barash. “It certainly seems like they have more bodies and more enforcement now. The CRA has sent a strong message.”

The news outlet sought out comment from an industry veteran, Eric Jacovetti, who has previously worked in cultivation and for a cannabis-related staffing company, but currently runs cannabis-related equipment rental. Jacovetti added that the CRA has only reached the tip of the iceberg, so to speak, in terms of uncovering black market operations. “Just the way the current system is set up, you’d have to go to facilities and be auditing sticker by sticker, batch by batch, and I just don’t see that happening,” said Jacovetti. “I don’t even know how they could do it, en masse. A lot of this is still self-policing and thankfully there’s not a lot of folks that don’t want to break the rules.”

Despite the growth in sales, some believe that Michigan is reaching a cap soon. Prices in December 2019 when sales first began included $323 for one ounce of flower, but by December 2023, prices had dipped to $95 an ounce. Just in 2023 though, per ounce prices were lowest in January 2023 with $80.15 an ounce, and highest in July 2023 with $98.65 per ounce. After July, prices remained stable.

NORML board member and Meds Café operations manager, Jamie Lowell, predicts that the more drastic price decreases in 2022 pushed away investors, leading to a decrease in supply in the near future. “We could be looking at a scenario in the future where there’s not as much inventory in the pipeline,” said Lowell. “A lot of people just backed off because of market saturation.”

Michigan currently uses private labs for product testing, which is funded by cannabis producers, but some allegations claim that labs can potentially be changing product results to benefit business owners and not consumers. To counter this, the CRA is working on building a state-run testing lab that will verify test results and perform audits on those labs. The new lab will be built using $2.8 million from Gov. Gretchen Whitmer’s 2024 budget, and is expected to open sometime this year.

“I think it could definitely have an impact on the safety compliance portion of the business, which definitely needs some correction,” Barash commented about the state lab. “If that gets corrected, it could definitely impact pricing. Because if these results are artificial and we now see the true colors of these results, it will probably have a negative impact on prices, because it’s all based on THC.”

Proof of corruption has been found in other parts of the industry as well. Last September, former legislator and head of the Michigan Marijuana Licensing Board and Marihuana Advisory Board, Rick Johnson, plead guilty to accepting $110,000 in cannabis-related bribes while in office between 2017-2019. “I am a corrupt politician,” he said in court, which followed with a sentence of 4.5 years in prison. U.S. Attorney Mark Totten told AP News that Johnson exploited the system. “Rick Johnson’s brazen corruption tainted an emerging industry, squandered the public’s trust and scorned a democracy that depends on the rule of law,” Totten said.

However, other legislators continue to push to change the industry for the better, in some cases. In May 2023, legislators proposed a rule change to stop drug testing potential government employees for cannabis, which took place later in October. Michigan Civil Service Commissioner Nick Ciaramitaro said that it’s well past time that the rule was implemented. “Whether or not we agree with it or not is kind of beyond the point,” Ciaramitaro said. “Use of marijuana on the job is different than having used it months before you take the test … It doesn’t make sense to limit our ability to hire qualified people because they took a gummy two weeks ago.”

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Two cannabis bills were recently sent to the desk of Gov. Gretchen Whitmer, and if passed, would work in tandem to allow the Cannabis Regulatory Agency (CRA) to do business with local Native American cannabis businesses, and vice versa.

Currently, state licensed cannabis and tribal cannabis businesses must operate separately from one another and cannot trade or do business with one another. Senate Bill 179 and Senate Bill 180 would permit these two distinct parts of the industry to interact.

“According to committee testimony, the marijuana industry regulated by the CRA and businesses operated by tribal members on tribal lands are currently in two separate silos, meaning that product cannot be sold between these businesses,” the analysis stated. “The bills are intended to allow for the sale of product between the two types of businesses while maintaining a level playing field by requiring tribal businesses to pay the same tax rate as other businesses.”

SB-180, sponsored by Sen. Roger Hauck, would allow the CRA to enter into an agreement with a Native American tribe “regarding marijuana-related regulatory issues that involve the interests of Michigan and the Indian tribe, including those related to the commercial growing, processing, sale, testing, transportation, and possession of marijuana.” Tribal businesses would be exempt from the 10% state excise tax on cannabis but would instead implement a tribal tax of 10% instead.

It also includes a section clearly stating that it is not unlawful to conduct these agreements. “The act currently provides that certain acts performed by licensees are not unlawful; not an offense; not grounds for seizing or forfeiting property; not grounds for arrest, prosecution, or penalty in any manner; not grounds for search or inspection except as authorized by the act; and not grounds to deny any other right or privilege.”

SB-179, sponsored by Sen. Jeff Irwin, amends state law to give a portion of state cannabis tax revenue to tribes who allow state licensed cannabis business on their land. “The bill would provide that, if a marijuana retailer or microbusiness is located in Indian lands, the portions of the unexpended balances attributable to the marijuana retailer or microbusiness that would otherwise have been allocated to a municipality and a county as described above must instead be allocated to the Indian tribe in whose Indian lands the marijuana retailer or microbusiness is located.”

Both SB-180 and SB-179 must be passed in order for them to take effect. The Native American tribes in support of this include the Grand Traverse Band of Ottawa and Chippewa Indians, Saginaw Chippewa Indian Tribe, as well as the CRA, Common Citizen (a Michigan-based cannabis brand), and Michigan Cannabis Industry Authority.

Numerous other cannabis- or psychedelic-related bills have also been working through the legislature recently. In July, the Michigan Civil Service Commission adopted a rule to stop cannabis drug screenings for most state government employees. Commission member Nick Ciaramitaro explained that it’s long overdue to implement the new rule. “Whether or not we agree with it or not is kind of beyond the point,” said Ciaramitaro. “Use of marijuana on the job is different than having used it months before you take the test … It doesn’t make sense to limit our ability to hire qualified people because they took a gummy two weeks ago.” The rule took place starting on Oct. 1.

In September, Michigan legislators passed a resolution and asked congress, the Department of Defense, and Department of Veterans Affairs to “prioritize research and investment in non-technology treatment options for servicemembers and veterans who have psychological trauma as a result of military service.”

The resolution also addresses how “effective treatment options for these conditions vary from servicemember to servicemember” when it comes to psychedelic treatments. 

It also adds the importance of supporting veterans’ family members as well, stating that “resources should be made available to help them understand and assist their loved ones who may be suffering from psychological trauma. Family members of servicemembers or veterans with behavioral health problems may experience family violence and aggression, lower parenting satisfaction, and child behavior problems.”

A new bill introduced earlier this month focuses on cannabis for students kindergarten through 12th grade. If passed, it would allow cannabis to be on campus for medical use, as long as two medical professionals have provided written permission. Additionally, teachers would oversee administering the medicine.

In August, the Michigan Cannabis Regulatory Agency reported cannabis revenue was at record-highs, having collected $276 million in sales for the month of July. Despite high sales numbers, many cannabis businesses have reported low profits. National Cannabis Industry Association’s senior economist, Beau Whitney, explained the effects of new licenses being approved, creating endless competition. “It’s kind of a race to the bottom, as they call it,” said Whitney. “Prices are going down, down and down because there’s so much competition, but at some point, prices won’t be able to go down any further.” 

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Tens of millions of dollars have been doled out to local governments across Michigan as a result of the state’s cannabis industry. 

FOX 2 Detroit reports that the state sent out nearly $60 million to counties and local governments.

“Local governments that have approved the recreational sale of weed in their county, city, village, or township will see approximately $51,800 for every retail store and micro-business that it’s handed out licenses to,” the station says.

According to FOX 2 Detroit, “Only 30% of total adult-use sales go to local governments, with the other 70% going to schools and roads. When contributions from last year are paired next to figures from 2021 and 2020, they show an industry that shows no signs of slowing down.”

Voters in the state legalized adult-use cannabis in 2018, when they approved Proposal 1. 

That initiative made it legal for adults 21 and older to toke up, and cleared the way for a regulated cannabis market that launched in 2019. 

But despite strong sales numbers, Michigan, like other regulated cannabis markets, has become oversupplied with pot.

Politico reported last year that the “number of cannabis grow operations serving the state’s recreational market has almost doubled in the past year,” and that the “number of active marijuana plants now exceeds 1.2 million, roughly six times the volume seen in 2020.”

“Michigan has way too much weed,” Politico said then.

“By one estimate, Michigan has enough cultivation capacity to supply three times as much weed as the state’s consumers are buying — and that doesn’t include the huge illegal market that by all accounts commands a large share of sales.”

That, according to Politico, makes Michigan “emblematic of what’s been happening across the country all year — and why the industry’s been in a funk even as legalization spreads: Ill-fated hopes that a Democratic-controlled Washington might loosen decades-old restrictions on the drug have given way to a market glut and plummeting prices that have put scores of businesses at risk of collapse.”

But that is not to say that Michigan’s recreational cannabis industry hasn’t experienced growth.

As FOX 2 Detroit noted, “224 municipalities had registered 1,148 business licenses” last year. That’s up from 163 municipalities and 748 licenses in 2021, and 104 municipalities and 356 licenses in 2020. 

The station has more details on the state’s latest cannabis sales figures:

“The latest figures come from the Michigan Department of Treasury which reported $198.4 million in revenue from recreational pot last year. Another $69.4 million will go to School Aid Fund, while $69.4 million will go to the transportation fund. In total, $1.8 billion in sales from weed came last year. To put that in context, there were $341 million in total sales in 2020. In 2021, the state reported $1.1 billion in sales.”

Michigan Gov. Gretchen Whitmer, a Democrat, supported Proposal 1.

Late last year, Whitmer vetoed several Republican-sponsored bills that, among other things, aimed to ease access to the state’s medical cannabis program, which began in 2008, for both patients and prospective operators.

In her veto message, Whitmer said that the proposals were passed hastily by lawmakers and required closer examination.

“I look forward to working with the new Legislature in January on priorities that will continue our economic momentum, help lower costs, and expand education supports for Michigan students. It is time to be serious about solving problems and getting things done that will make working families’ lives better right now,” Whitmer said at the time.

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Calling them rushed, Michigan Gov. Gretchen Whitmer recently vetoed 11 bills including three medical cannabis bills, with others related to retirement and tax. The governor did however sign into law six other bills approved by the Legislature. 

Michigan Advance reports that Whitmer said in her veto letter to the Legislature on Dec. 22 that the bills “were rushed through a lame duck session and need closer examination.”

Whitmer vetoed a few Republican-sponsored medical cannabis bills that would have made some changes to the processing and distribution of cannabis.

Rep. Roger Hauck (R – Union Township) introduced two bills that were vetoed: House Bill 5871, which would have amended state law to ease access to medical cannabis products, making them easier to be transferred from one facility to another. HB 5871 would also prohibit a background check of an applicant’s spouse under certain circumstances. 

House Bill 5965, on the other hand, would have updated some language and definitions in the state’s Medical Marihuana Facilities Licensing Act, such as the title for the state’s Cannabis Regulatory Agency (CRA).

Another medical cannabis-related bill was vetoed. House Bill 5839, introduced by Rep. Pat Outman (R – Six Lakes), would have prevented the CRA from denying a person a license to sell cannabis based on their spouse’s job, including if their spouse works for the state or federal government.

“I look forward to working with the new Legislature in January on priorities that will continue our economic momentum, help lower costs, and expand education supports for Michigan students. It is time to be serious about solving problems and getting things done that will make working families’ lives better right now,” Whitmer wrote in her veto letter last month. 

Several other bills were vetoed such as bill package HB 4263–4266, which would have required that retirement systems for public school employees, state employees, judges, and state police to pay off debt over time in equal installments.

HB 4188, introduced by Rep. Thomas Albert (R – Lowell), would have amended the state’s Public School Employees Retirement Act. Several other bills were vetoed as well.

Michigan’s Cannabis Industry

The governor doesn’t want rushed bills coming to her desk. Part of the concern may be due to other nagging problems, despite production taking off into high numbers. Politico reports, for example, that the number of Michigan cannabis plants is roughly six times the volume seen in 2020, causing a serious oversupply problem.

The price of cannabis in the Michigan adult-use market plunged about 75%, from nearly $400 an ounce to less than $100 over the past two years. That drop in price triggered some industry officials to call for a moratorium on cultivation licenses.

MLive reports that 2022 was a good year for customers, on the other hand, who are paying prices much lower than normal this year. 

According to November 2022 numbers, the average retail cost for an ounce of cannabis plummeted to a record low of $95 with some strains falling to near $60 per ounce in retail cannabis stores.

Retail cannabis sales are doing fantastic—on track to surpass $2 billion in annual tax revenue.

Last August, Gov. Gretchen Whitmer replaced outgoing former Cannabis Regulatory Agency Director Andrew Brisbo, who helped launch the state’s adult-use marijuana in December 2019, with Director Brian Hanna.

This year, the Democratic party is in control of both the Michigan House and Senate in Michigan’s Legislature. 2023 marks the first year Democrats will hold the majority since 1984. Michigan’s House is adjourned until Wednesday, Jan. 11.

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The official overseeing Michigan’s cannabis regulatory arm who has helped shape the state’s nascent recreational pot market is leaving his post.

Andrew Brisbo, who has served as executive director of the Michigan Cannabis Regulatory Agency since 2019, will be leaving the role to take a new position at the state’s Department of Licensing and Regulatory Affairs, the Detroit Free Press reported on Tuesday.

A spokesperson for Michigan Gov. Gretchen Whitmer confirmed the moves to the Free Press.

“We are proud of the incredible team at the Cannabis Regulatory Agency for establishing Michigan as one of the top cannabis markets in the country,” Bobby Leddy, a spokesperson for the governor, told the newspaper in a statement.

Brisbo has led the agency since its inception. In 2019, as the state prepared for the launch of the recreational pot market, Whitmer consolidated the state’s regulation of cannabis under one singular entity: the Cannabis Regulatory Agency.

Brisbo was appointed to head the new agency after previously serving as director of the Bureau of Marijuana Regulation, which the CRA replaced.

“Andrew will be critical in determining and achieving solutions as we develop new marijuana regulations in Michigan,” Whitmer said in a statement at the time, as quoted by the Detroit Free Press. “He brings a wealth of expert knowledge on this subject, which will be essential through this implementation process while protecting Michigan residents.”  

Michigan voters legalized medical cannabis in 2008; ten years later, they did the same for recreational pot use.

As the Free Press reported in 2019, Whitmer created the singular regulatory agency “to better coordinate the medical marijuana market…with the adult-use recreational,” which launched in early 2020.

The agency was renamed from the Marijuana Regulatory Agency to the Cannabis Regulatory Agency in February and was charged with the task of regulating “the processing, distribution, and sale of both hemp and marijuana going forward.”

“Consolidating multiple government functions into the newly named Cannabis Regulatory Agency will help us continue growing our economy and creating jobs,” Whitmer, a Democrat, said in a statement at the time. “And to be blunt-safe, legal cannabis entrepreneurship, farming and consumption helps us put Michiganders first by directing the large windfall of tax revenue from this new industry to make bigger, bolder investments in local schools, roads, and first responders.”

Whitmer’s office said the restructuring, which came via the governor’s executive order, would “allow for a more effective, efficient administration and enforcement of Michigan laws regulating cannabis in all its forms.”

Whatever the agency’s been called, it’s been Brisbo in charge, and Michigan’s recreational cannabis industry has been a roaring success.

“Under Brisbo’s leadership, Michigan’s recreational cannabis industry rapidly expanded,” the Free Press reported on Tuesday.

A report last year found that Michigan had seen more jobs added to its cannabis industry than any other state that has legalized pot. The report from Leafly found that the state’s regulated weed market had 18,000 jobs at the time.

The Free Press reported this week that Leddy, Whitmer’s spokesperson, said that Michigan’s adult-use cannabis industry has led to the “creation of more than 20,000 jobs in the cannabis industry and the generation of $500 million in tax revenue.”

“There are now more cannabis workers than cops in Michigan,” Leafly said in its report last year. “In a state known for its auto industry, the number of cannabis workers is now roughly equal to the number of auto repair mechanics.”

But the Free Press noted that the still-young industry has experienced “growing pains” in recent months. Although “sales and cannabis businesses in the state have continued to increase,” the Free Press reported, “the price of marijuana flower has dropped, pinching profits for many companies, with some laying off staff or closing their operations entirely.”

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