Michigan phases out medical marijuana supply recreational market

As Michigan’s recreational marijuana market goes from strength to strength, the state’s medical marijuana caregivers are no longer allowed to sell excess cannabis to adult-use dispensaries.

Michigan became the tenth state to legalize recreational cannabis less than a year ago, while the state’s medical marijuana program has been operational since 2008 and is second only to California in terms of production and sales.

Michigan’s established and competitive medical cannabis market led to medical marijuana caregivers being initially included in the state’s recreational weed supply chain as they are permitted to grow up to 72 plants. This meant caregivers provided as much as two-thirds of the cannabis available in adult-use dispensaries when Michigan’s recreational market started in December, 2019.

As of September 30, 2020, a transition that started in March from caregivers to licensed growers as recognized marijuana producers has been completed.

Over this period, cannabis production in Michigan ramped up substantially. The chief of Michigan’s Marijuana Regulatory Agency, Andrew Brisbo, said the number of plants under cultivation in the state had almost quadrupled from around 110,000 in January to 424,000 in September. Brisbo said it’s thanks to the transition that prices and supply of marijuana in Michigan remained steady.

In contrast, as the state’s adult-use cannabis market matures the number of registered medical cannabis caregivers is in decline. In October of last year, there were 37,875 registered caregivers. Last month, this number had dropped to 31,521.

Michigan is now reaping the rewards of increased marijuana production with healthy sales figures. Michigan has now overtaken Nevada as the fifth highest-grossing state for marijuana sales, while the industry looks set to bring in more than a billion dollars annually.

The legal recreational market in Michigan has come a long way in a short time. In January, long queues outside of dispensaries with limited stock were the norm. Meanwhile, Illinois reported stronger marijuana sales on the first day of its legal market – January 1, 2020 – than Michigan managed in its first week.

From sales of $9.8 million in January, recreational marijuana sales in Michigan hit $65.5 million in August. Clearly, the Covid-19 pandemic had relatively little impact on Michigan’s fledgling adult-use cannabis industry as weed retail stores were allowed to stay open as “essential services” for curbside pickups and deliveries. For now, Michigan’s recreational cannabis industry benefits from neighboring state laws in New York, Indiana and Ohio that still prohibit adult-use marijuana sales which leads to cross-border weed tourism. New York Gov. Cuomo is keen to legalize recreational marijuana but he put his efforts on hold for this year due to the coronavirus outbreak. Similarly, an Ohio campaign to put a marijuana legalization question on the state’s November ballot was derailed by the Covid-19 pandemic.

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