In November 2018, voters in Michigan approved a ballot measure legalizing adult use, but the regulatory structure for the new market is not expected to be in place until 2020. Until then, it is legal to possess and use cannabis, but no one has a license to sell, so entrepreneurs are skirting the law by giving marijuana away as part of a sale of other items.
Washington, D.C., is in a similar legal situation, which has led to what are called pop-up shops, in which various consumer items are sold at relatively high prices and marijuana is given as a gift. Although the police in Washington have said that the practice is illegal and have raided pop-up shops, the practice continues, and police tend to look the other way unless neighbors complain.
Gifting in Michigan
In Detroit and Ann Arbor, an entrepreneur named Brandon Anthony operates a company called On High Road. Its practice is to sell a munchies bag (prices range from $55 to $120) via its website. Along with the food (or a T-shirt), marijuana is delivered or readied for pickup. As Anthony told Civilized: “With all the legal and licensing fees…we figured out a legal loophole” and that an attorney has advised him on his business plan. He also told the Free Press that “under the laws in Michigan, you can gift up to 2.5 ounces.” The Free Press also reports that although public officials have said that a “gift” of cannabis that is part of a sales transaction is a violation of the law, they have not said what they will do to end the practice. According to Detroit News, the office of Gov. Gretchen Whitmer replied to a query on the issue with an email saying: “The governor-elect has said she wants to take a thoughtful approach, with all of the facts, before making any decisions after January 1. This is something that is a new charge for state government, that crosses multiple departments and that will require a thoughtful, inclusive strategy moving forward.” Whitmer campaigned on the issues of legalization and righting the wrongs of disparate enforcement.
Michigan’s gifting entrepreneurs are aware of the uncertain legality of their businesses, so they report they keep inventory low and try to stay as compliant as possible by advertising the items for sale rather than the marijuana.
Whatever the legal risk, Anthony is not alone. Forbes reports that another business has been profitably following the same model in Ann Arbor, using a straightforward advertising slogan: “Buy some chocolate, get some weed.” Another business follows a similar model in Detroit, selling T-shirts ranging in price from $80 to $340 that come with a gift of weed.
Gifting is not the only way that entrepreneurs are entering the market in Detroit. Gigi Diaz, who won High Times’ chef of the year award in 2017, offers cooking shows with tastings. Tickets to the cooking show are sold on Eventbrite.
While these entrepreneurs have found a way to enter Michigan’s adult use market, they may not be able to stay. Participation in a legally questionable cannabis business may count against them should they seek a license in the forthcoming regulated market. Detroit News quotes cannabis attorney Alex Leonowicz as saying: “If you are looking to go into this industry on a commercial basis, this is not something you should be doing.” For now, however, several entrepreneurs are making money by giving cannabis away in Michigan.
What do you think? Will these entrepreneurs be able to obtain licenses later? Leave a comment below.