Everything You Need to Know About Michigan’s Marijuana Market
It seems like every other day there is a new, legal marijuana market popping up somewhere, somehow. However, when it comes to the wholesome state of Michigan, that is not the case. In fact, and in hindsight, Michigan might be one of the earliest adopters of the cannabis industry. The first to reap the benefits of the illustrious plant, Michigan turned itself into the Sweet Leaf Capital.
As with every new industry, whether it be something as complex as technology or as simple as a plant, there will always be people who are hesitant, and people who are flat out bearish about the entire ordeal. But then you have the ones who are eager to jump at the opportunity. And without question, Michigan has reaped the rewards that come with being an early adopter. Especially one as promising, and opportunistic, as the cannabis industry. From the legalization of Cannabis, comes an abundance of economic activity, and economic sub-sectors, like cannabis real estate loans, cannabis equipment financing, and much more.
That is one point of view of how Michigan has been able to utilize its bold move towards legalization. But of course, there are other aspects as well. Here is everything you need to know about Michigan’s Marijuana Market.
The Market Keeps Growing
Of course, the first thing on anyone’s mind is “how is the market doing?” Like many other states, cities, or countries that have legalized cannabis, the state of Michigan quickly saw demand outstrip supply. Michigan’s recreational market grew at a record fast pace.
In 2020 alone, the state of Michigan generated $400 million to $475 million in sales alone. Even with the onslaught of the pandemic, Michigan was still able to navigate through the obstacles, and maintain the hefty volume in sales.
This isn’t a fluke, and the sales aren’t expected to slow down. But in fact, they are expected to keep on growing, with estimates putting numbers of sales to reach $1.9 billion to $2.4 billion by 2024. That is almost a 5 times market growth rate. As more and more consumers, customers, and even market players transition from the illegal market of Marijuana towards the legal one, these numbers and statistics are only expected to grow.
A Need For Cash
High Life Farm is Michigan’s largest and oldest cannabis cultivator. High Life Farms owns and operates a 6,000-plant grow facility as well as striking deals with several converted licensing agreements with popular Cannabis plants. This need and urgency to increase the supply to meet the demand will without a doubt lead to more and more financing tools for this market. As cultivators, farmers, and even dispensaries look to continue to grow and expand, they’re going to look for ways to finance this growth.
Currently, financial institutions like banks and funds, are not allowed, even prohibited, from dealing with cannabis firms. They are also not allowed to accept electronic payments, cash, checks, or any sort of payment from cannabis businesses. Some cannabis entrepreneurs say this requires cannabis companies and individual professionals to have large-scale capital on reserve if need be. At the moment, the cannabis industry is on the outside of the financial system looking in.
However, recent legislation being passed around on the federal level could very well change that situation. If that were the case, cannabis business owners would be able to apply to several forms of loans. We could see the birth of cannabis real estate loans, cannabis equipment lending, and other forms of cannabis working capital loans. This opening up to the cannabis industry will only fuel its potency and growth.
A Friendly State
The success of marijuana in Michigan, making it the sweet leaf capital, was not an overnight success or a fluke. In fact, the road to cannabis prosperity was long and bumpy. Michigan first legalized marijuana for medical use back in 2008. This early adoption and investment in cannabis paid off in the long run. Michigan is oftentimes -until today- is called the closest to California in the Midwest. A point meant to compare an up-and-coming example, to the most ideal scenario.
All this could not have been possible if the state of Michigan was not supportive of marijuana, its usage, and its legalization. Several CEOs of companies in Michigan lament the state’s regularly powerful performance in adapting to the times and accepting the benefits of marijuana. Some also credit Michigan’s Marijuana Regulatory Agency for the success that Michigan has had with the cannabis plant.
No matter how you slice it and dice it, Michigan has set an example, a blueprint for how to best go about the legalization process. It’s best to split the process into incremental steps and milestones. Then it’s best to galvanize the support of the entire state, not just the governing bodies. After all, the biggest financiers will be the constituents of that state. Then pave the way towards recreational use and allow the market to partake in healthy competition. These are some of the crucial steps that a state should take when considering the legalization of cannabis.
The Bottom Line
Cannabis is likely to have a huge future in several industries across the board. All around the world, cities, and countries, are rushing towards legalization efforts, for their own reasons. Some are handicapped economically and can use the sweet leaf capital generated from the cannabis plant. Others are eager to experiment with the psychological and physical benefits of the plant, and further enhance it for its medical capabilities.
As for the Midwest state of Michigan, it was always big on cannabis. One might say the very first marijuana advocates. Their legalization efforts stem all the way from 2008. It has been a long road, but one filled with promise and prosperity. Of course, the boatloads of profits that they have been able to sustain year in and year out are not too shabby. Especially considering that they have skyrocketed to a billion-dollar market. In the end, there is no debate that the future looks green for Michigan.