![]() If you’ve taken a road trip in the past few years, you’ve definitely spotted the billboards dotting Indiana’s interstates and highways advertising cannabis dispensaries in Michigan and Illinois. ![]() “When it comes to prices," he said, "it could be a race to the bottom.A billboard advertising Green Stem Provisioning, a dispensary located in Niles, Michigan. ![]() With the number of growers, processors and dispensaries in Michigan, it’s doubtful there will be anything but downward price pressure for the foreseeable future, Kilmer said. In the end, the businesses that survive might be operators who have built a strong following in much the same way microbreweries have proliferated with multinational companies controlling most of the beer sold in the country. And that doesn’t include the possibility of imports from other countries where marijuana could be grown and processed more cheaply. “All of the nation’s marijuana could be grown at a couple of dozen industrial farms across the country,” Kilmer said. “Large companies will be the ones driving the market.”Īnd they’d be looking to improve efficiency. Legalization on a national level would allow “big liquor, tobacco and even Amazon” to get into the business, Kilmer said. “People complain about the federal prohibition, but it’s what’s keeping them in business,” Kilmer said. Without limits on the amount of cannabis that’s produced, there’s no surprise that prices in Michigan have been coming down and will likely continue to fall, Kilmer said.īut it’s also unlikely that the oversupply issue will be solved even if the federal government eventually decriminalizes marijuana, allowing it to potentially be shipped to adjoining states. If that happened, Michigan growers would have an opportunity to instantly expand their market reach into states that haven’t developed the infrastructure necessary to produce cannabis-related products.įederal prohibitions regarding cannabis might very well be relaxed or eliminated in the future, as recreational marijuana is now legal for about 40% of the nation’s population, said Beau Kilmer, chairman of the Rand Drug Policy Research Center in California. Observers speculate that growers who are investing tens of millions of dollars might be banking on a change in federal law that would allow marijuana to be transported to other states, such as Indiana. ![]() Beyond mergers and acquisitions, some believe there also will be a lot of business failures. Transformative: Marijuana boom brings jobs and new life to factories, storefronts in southwest Michiganīut it’s questionable whether demand will ever be able to catch up with the ever-expanding number of dispensaries and facilities that grow and process marijuana. To some degree, the market for cannabis products might still be in its infancy, with researchers studying the possible benefits from the 80-plus cannabinoids contained in the marijuana plant. “We have 10-times the number of products compared to when we opened,” said Paniagua from Cannivista, pointing out the vapes, tinctures, edibles, bath bombs and other items that are available. On the retail side of the business, it’s also critical to provide an environment and friendly, knowledgeable staff to help customers sort through the wide array of cannabis-related products that are available. “And quality is the only way to win the game.”Ī grower that develops a reputation for high-quality cannabis builds brand loyalty and having dispensaries guarantees shelf space - and some necessary margins - where the public can find those products. “With this much competition, vertical integration is key,” said Ingo Ausland, vice president of operations for NoBo Michigan. That’s the same strategy being employed by NoBo, which operates a grow and processing plant in Benton Harbor as well as retail outlets in Benton Harbor, Edwardsburg, Muskegon and Battle Creek. That’s one way to deal with the competitive environment.īut Lynch believes vertical integration also will be key to surviving the highly competitive environment, so the family-run business plans to open its own grow and processing facility in Niles in the next several weeks. Lynch said Green Stem routinely gets calls from business brokers who are looking for opportunities to buy, sell or form strategic partnerships. And such deals are likely to become common as businesses look ahead at the competitive environment. That might have been what prompted Common Citizen, which operates a 70-acre greenhouse in Marshall, Mich., to recently enter into a partnership with Cannavista in Buchanan. That’s a lot of volume for the market to absorb and could result in near-term mergers and acquisitions within the state’s cannabis industry as those who are solely focused on growing and processing look for guaranteed shelf space inside dispensaries. Packaged cannabis sits in a supply room at Green Stem Provisioning on Thursday, March 10, 2022, in Niles.
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