Big business favored on medical marijuana?

November 21, 2017

 

December 15, 2017 marks the official start of Michigan's green gold rush, as the Bureau of Medical Marijuana Regulation begins accepting licensee applications from prospectors looking to enter what is expected to be a billion-dollar industry. But requirements still being hashed out in mid-November by state regulators have some concerned that those who have already staked a claim in the medical marijuana field will be left out of the state's regulated marketplace.

 

With the exception of certified caregivers, who are  limited to growing a maximum of 12 plants per patient with a maximum of five patients, those hoping to get into the medical marijuana business will need to obtain a license from LARA, Michigan’s Department of Licensing and Regulatory Affairs. Those licenses fall into five categories: growers, who grow, cultivate cure and package medical marijuana for sale; processors, who purchase marijuana from growers and extract the active drugs from the plant for use in making marijuana-infused products, such as edibles, oils and tinctures; provisioning centers, which purchase and may sell medical marijuana and marijuana-infused products; secure transporters, which are the only ones who may transport medical marijuana between growers, sellers and processors; and safety compliance centers, or laboratories that test marijuana for contaminants and drug levels.

 

The new licenses and framework of the state's regulation system were established under Michigan's Medical Marijuana Facilities Act, which was approved by the legislature and governor in 2016. The law also calls for the creation of a five-member Medical Marijuana Licensing Board, which is responsible for implementing and administering the new act, including licensing, regulating and enforcing the licensing and regulation system. Operating within LARA, the act requires the board to write rules regarding license requirements, license fees, assessments and other criteria for determining the issuance of licenses. The board is also responsible for reviewing applications and issuing licenses, after December 15.

 

Under the facilities act, the five members of the state's Medical Marijuana Licensing Board, as well as members of their family, are prohibited from being on a board of a licensee or having financial interest in a licensee or applicant. Members must also disclose any legal or beneficial interests in real property that may be directly or indirectly involved with marijuana operations. Those disclosures must be filed with the governor's office, which isn't subject to Freedom Of Information Act requests. The governor's office spokeswoman said the office doesn't release financial disclosures from board members to the public, instead referring requests to LARA.

 

Under the act, all members of the board must be residents of Michigan, with no more than three being members of the same political party. One — board chair Rick Johnson — is appointed from three nominees submitted by the Senate Majority Leader; one — David LaMontaine — appointed from three nominees submitted by the Speaker of the House. The governor appoints the board chair and the three additional members: Nichole Cover, of Mattawan, a licensed pharmacist and healthcare supervisor for Walgreens who also serves as chair of the state's Board of Pharmacy; retired Michigan State Police Sergeant Donald Bailey, of Traverse City; and Vivian Pickard, of Bloomfield Hills, CEO of the Pickard Group consulting firm and former director of public policy for General Motors, and former president of the General Motors Foundation.

 

LaMontaine, of Monroe, is a business agent and executive board member for the Police Officers' Association of Michigan.

 

Johnson, of LeRoy, who serves as the board's chair, manages Common Cents Farm and served in the state legislature, including four years as Speaker of the House.

 

Johnson, who also spent a decade as a registered lobbyist in Lansing, came under scrutiny in October when the Michigan Campaign Finance Network revealed one of Johnson's former clients is considering pursuing a license from the board he chairs. The story also said Johnson filed financial disclosure information required under the law after being appointed to the board.

 

The board is currently working to complete and publish emergency rules for license applicants to follow, with final rules expected to be crafted in the following year. Meanwhile, state lawmakers and local municipalities are scrambling to enact additional oversight to shape the state's medical marijuana marketplace. This after medical marijuana was overwhelmingly approved by Michigan voters on a statewide ballot proposal in November 2008.

 

Legislators in 2016 approved three bills, including the Medical Marijuana Facilities Act, which created the framework for the state's licensing and regulation system that will allow licensed growers and dispensaries, as well as require testing for all medical marijuana for levels of active ingredients, as well as contaminants such as pesticides. The act also allows for the processing and sale of marijuana for edible products, oils and other marijuana-infused items, as well as requires the secure transport of marijuana and marijuana-infused items. Another bill that was passed in conjunction with the Facilities Act allows for the creation, sale and regulation of marijuana-infused items, and provides a retroactive criminal defense for those convicted of violating the state's law, which didn't previously address marijuana-infused items. The third bill created the state's marijuana tracking system, which is required to track all medical marijuana sales and operations, from seed to sale to the patient.

 

Under the Medical Marijuana Facilities Act, LARA has until December 15 to begin accepting applications for medical marijuana license facilities. Temporary emergency rules are expected to be released by late November, as LARA's Bureau of Medical Marijuana Regulation has issued a series of advisories detailing proposed rules.

 

Attorney and marijuana activist Matthew Abel, who founded the Detroit-based law firm Cannabis Counsel, PLC, and serves as executive director for Michigan's National Organization for the Reform of Marijuana Laws (NORML), said the proposed regulations have received a lot of push back from those hoping to enter the new marketplace. That includes both caregivers and small business entrepreneurs, as well as big business interests with millions to invest. 

 

"The people who are the trailblazers in this will probably be left out," Abel said, referring to dispensaries and caregivers who currently support the state's 240,000-plus medical marijuana patients.

 

Under state law and the regulations being formed, caregivers are only permitted to sell medical marijuana to a certified patient who has listed them as their official caregiver. That means caregivers can't legally sell marijuana to dispensaries or random patients. Further, dispensaries currently operating without a state license must acquire a license by June 15, 2018 or shut down. Those dispensaries that continue to operate past the June 15 deadline will risk having their license denied by the state.

 

Applicants seeking any of the five license categories from the state will be required to undergo thorough background checks, which include a review of their criminal, business and financial history. The state also said it is imposing capitalization requirements from applicants, which includes the sources and total amount of the capitalization to operate and maintain the proposed marijuana facility.

 

In order to be granted a medical marijuana facility license, applicants will be required to demonstrate capitalization amounts of: $300,000 for processors; $300,000 for a provisioning center; $200,000 for a secure transporter; and $200,000 for a safety compliance facility. Grower licenses are divided into three classes: Class A licenses, which permit up to 500 plants, require $150,000 in demonstrated capitalization; Class B licenses, which permit up to 1,000 plants, require $300,000 in demonstrated capitalization; and Class C licenses, which permit up to 1,500 plants, require $500,000 in demonstrated capitalization.

 

The capitalization requirements are part of the proposed regulations being formed by LARA, and are not specifically included in the state's Medical Marijuana Facilities Act, which was passed in 2016.

 

"The state law has no capitalization requirement and some think there shouldn't be one at all," Abel said. "On one hand, you have to have enough money to pay the electric bill, but if I want to fall flat on my face, there are a lot of other businesses that fall flat on their face.

 

"Some people think they are trying to squeeze out the little guy. I think $500,000 for a 1,500-plant grow seems a little inordinate. Anyone who applies for a license has to give an estimate of gross annual revenue, and to do that you have to write a business plan. I'm not sure if that plan has to be released, but they should anticipate costs for the year. Anyone who goes into it would be foolish if they didn't have an idea to do that, so in a lot of ways the requirements are unnecessary. Yes, they need that much money, but that ought to be up to me to figure it out."

 

On November 8, LARA's Bureau of Medical Marijuana Regulation issued an advisory saying the licensing board may consider a variety of sources of capitalization, such as 401k accounts, certificates of deposit (CDs) and other common investments to count toward capitalization requirements. At least 25 percent of an applicants' capitalization must be in liquid assets, or be easily converted into cash.

 

"Capitalization standards are an important part of the regulatory structure that will help ensure both business stability and safe, reliable access to medical marijuana for patients," said Andrew Brisbow, the bureau's director. "These requirements were developed after researching other Michigan industries and best practices from states with medical marijuana regulations."

 

While most states that regulate medical marijuana facilities have at least some sort of financial review as part of the application process, some, such as Arizona, Connecticut and Nevada, require between $150,000 and $2 million in assets.

 

In addition to capitalization requirements, licensees will need to pony up tens of thousands of dollars for license fees and annual assessments to the state, as well as local licensing fees where they plan to locate. A non-refundable state application fee estimated to be between $4,000 and $8,000 will be required before an application is processed. That fee is intended to offset costs for LARA and state police for investigative services conducting background checks. An annual regulatory assessment is also due prior to the issuance of each license and may vary depending on the number of licenses anticipated to be issued. Under the law, the assessments must provide at least $500,000 annually to LARA for substance abuse disorder programs, in addition to five percent of the cost of the Michigan Department of Health and Human Services for substance abuse-related expenses. While assessment amounts weren't finalized prior to publication, LARA said Class A licenses are capped at $10,000, with Class B and C assessments expected to be between $10,000 and $57,000.

 

Additional state-originated costs to licensees include a three-percent tax on each provisioning center's gross retail or receipts; the actual cost of investigations and processing that exceeds the application fees; and 

late renewal fees, if applicable.

 

While some small businesses hopefuls may be unable to meet the financial requirements set by the state, those with considerable funds at their disposal have additional options. For instance, LARA in its advisories has said it will allow for stacking and co-location of some licenses in a single facility, meaning a licensee may apply and be granted licenses for more than one type of activity. For instance, an applicant may apply for and be approved to co-locate a growing operation, processing center for producing oils and edibles, and a dispensary to sell all of the products at a single location. Further, growers are able to "stack" multiple Class C licenses at one location, allowing for multi-million dollar, "mega grow" facilities by stacking Class C licenses that allow for a maximum of 1,500 plants  each. 

 

While LARA has issued advisory bulletins on specifics of the regulations, there are emergency regulations that are expected to be issued in late November, and are still subject to change. Meanwhile, lawmakers seeking to address issues themselves are working to push changes through the legislature.

 

"They aren't showing us any drafts, they are just showing us trial balloons," said Abel. "They will be out in mid-November, and will be extended for six months. That gives the legislature time to go through the formal rule-making process. The whole process takes months, so there's not time for them to pass those (before the December 15 deadline). The emergency rules only need to be signed off by the governor. There will be permanent rules later."

 

Representative Jim Runestad (R-White Lake) has sponsored a bill in the state house that would place limitations on grower licenses to restrict the stacking of licenses at one single location to prevent "mega grow" operations. "I'm concerned about giant grow operations that could consume the whole industry and blot out the competition,” Runestad said. "Those who want mega grows think it’s the best for capitalism. But do we want a few billionaires or millionaires with a monopoly?"

 

Runestad said having a mix of both large and small grow operations is a good business model that could provide more competition and more options for patients. Unlimited licenses, he said, could lead to a monopoly which has the potential to snuff out small businesses, allowing super grows to control the market, raise prices and control policy.

 

"The very large operations are going to basically run off the smaller operators – that's the nature of it," he said.

 

Runestad said he may be open to more than one Class C grower license at one location but fewer than what he said would be considered a mega grow operation. He said he plans to meet with stakeholders to discern what an appropriate number of licenses at one location may be. Additionally, he said some questioned whether LARA should limit the total number of licenses it issues.

 

The bill, which was introduced on October 26, is currently being reviewed in the House Judiciary Committee, which is chaired by Runestad. "The testimony today was that 70 percent of these businesses will fail, and the primary reason is overproduction. There are other concern of producers sending it out to other states, or the people not making it going into the illicit market. I will take a look at whether capping makes sense or leaving it limitless," Runestad said. "It's not a federally legal product, so it's different than other businesses where an open market would dictate what's best. I think it does require the scrutiny of the legislature to make the best decision."

 

Another bill still working its way through the legislature is House Bill 5144, sponsored by West Bloomfield Republican Klint Kesto, who sponsored one of three bills that created the Medical Marijuana Facilities Act and created the state's Marijuana Tracking System Act. Kesto's new bill,  introduced in October, seeks to revise the Facilities Act. Those revisions include protections for certified public accountants and financial institutions from certain civil and criminal penalties; allow certain transfers of marijuana to be done without a secure transporter; revises information a municipality must provide to the state if it adopts ordinances allowing medical marijuana facilities; and allows information provided by a municipality to LARA to be subject to Freedom of Information Act requests.

 

Kesto's bill has support from the Michigan Responsibility Council, which represents potential grower licensees, and the Michigan Cannabis Development Association, which represents businesses in the medical marijuana field, and is one of the organizations that worked to have the Facilities Act created to address the failings of the state's original medical marijuana law.

 

In November of 2008, about 63 percent of Michigan voters approved a statewide ballot proposal making marijuana legal for medical purposes. The following year, the Michigan Medical Marijuana Act was enacted, making marijuana legal to those with an approved card issued by the state. To obtain marijuana, patients were permitted to either grow their own or find a certified caregiver to grow it for them. Caregivers are allowed to grow 12 plants per patient, with a maximum of six patients, including themselves.

 

The "caregiver system" – as it is dubbed in some of the other 29 states in the country where medical marijuana is legal –  led to several problems, including the challenge for some patients to find a caregiver. Today, there are more than 240,000 card-carrying patients in Michigan who are supposed to rely on about 30,000 caregivers, according to LARA. That means that even if all caregivers were connected to individual patients and all had growing operations, there would still be a shortage of caregivers for patients. 

 

To fill the gap, some have taken to opening dispensaries with the consent of local municipalities. Since the original medical marijuana act was passed, there have been at least 18 Michigan Court of Appeals hearings and eight different state Supreme Court rulings. The state has ultimately ruled that medical marijuana dispensaries aren't legally permitted under current state law, leading some law enforcement agencies and prosecutors, such as those in Oakland County, to crack down and close dispensaries. Still, others, such as the city of Detroit and many other local municipalities, have allowed them to operate.

 

Under the new law, a medical marijuana facility can only be located in a municipality that has ordinances that have expressly authorized the establishment of those facilities. Municipalities that choose to opt out may simply forego passing any ordinance and refuse such facilities by default.

 

Under the act, the state's Medical Marijuana Excise Fund would receive all money collected under the three-percent tax on provisioning centers' gross retail income, as well as any fees, fines and charges imposed other than licensing fees, annual assessments and local fees. Money in the funds would be apportioned, with 25 percent going to local municipalities where marijuana facilities are located; 30 percent to counties where facilities are located; five percent to support county sheriffs; 30 percent to the First Responder Presumed Coverage Fund; five percent to the Michigan Commission on Law Enforcement Standards for training; and five percent to the Michigan State Police Department.

 

As of November 15, just one Oakland County municipality, Orion Township, had passed an ordinance to allow for new medical marijuana facilities permitted under the 2016 law. That township will allow for all licensed facilities except provisioning centers in a small area. Officials in Ferndale, Hazel Park and Walled Lake said discussions are in progress to update ordinances in those municipalities. Municipalities in the Downtown newsmagazine distribution area, including Birmingham, Bloomfield Township, Bloomfield Hills, Rochester and Rochester Hills, have chosen to exclude medical marijuana facilities from operating in their communities.

 

Walled Lake City Manager Dennis Whitt said the city's planning commission is working on an updated ordinance to allow for dispensaries in the city. While the city already had an ordinance regulating dispensaries, the city's governing body ceased all such operations following a crackdown on such businesses by law enforcement.

 

Commerce Township Supervisor David Scott said the township once had more than 40 grow operations, but has since prohibited them and will continue to do so. "I haven't heard any push from residents that this is something they are interested in," he said. "Once things are regulated, we are open to looking at opportunities."

 

Ferndale Economic Development Director Justin Lyons said the city is in the process of updating its ordinance to align with the state’s soon to be released regulations. Currently, the city allows for five medical marijuana facilities to pursue special land use permits and operate. No such facilities are currently operating in the city.

 

As most municipalities have either opted out or are taking a "wait and see" approach to the new guidelines, those in favor of updating ordinances to allow for medical marijuana facilities are still waiting for additional guidance.

 

Oakland County Chief Deputy Prosecutor Paul Walton said that in speaking to police chiefs and city attorneys about the issue, none have had discussions about training, inspections or specifics related to potential facilities. "With the exception of one (in northern Michigan), all have said there have been no discussions," he said.

 

As a patchwork of caregivers and illegal dispensaries operate, Walton said they will butt up against the new law and licensed dispensaries. Those unable to receive licenses may attempt to continue operations. However, those obtaining licenses are likely to inform law enforcement of such activity.

 

"I think that the people who go through the licensing procedure, which is a tremendous expenditure of funds, will try to restrict competition," Walton said. "If the competition is coming from illegal grows and sellers, then I think there might be an uptick (in prosecutions) for a while. Legal businesses will inform law enforcement on illegal operations or on caregivers who are operating outside the limited provision of the caregiver law. We are introducing a new profit motive to this system."

 

It was only recently that legislators worked to address shortcomings of the 2009 law that a real framework for the state's medical marijuana market started to take place.

 

"We began working with the governor's office, and representatives (Mike) Callton (R-Nashville), (Klint) Kesto and (Lisa Posthumus) Lyons (R-Alto) on how to make a policy that made sense," said Sandra McCormick, executive director of the Michigan Cannabis Development Association. "We pulled from tobacco, liquor and other state statutes to come up with a regulatory system that makes sense."

 

McCormick said the association includes those seeking licenses as well as those in the business, along with secondary businesses that support future licensees, such as tax attorneys, insurance agents and others.

 

"If you're like me and you're not familiar with the science of marijuana cultivation, growing marijuana well is very difficult to do," said Doug Mains, an attorney with Honigman Miller Schwartz and Cohn representing the National Patients Rights Association at a state Senate committee hearing on a pair of bills on issues with unlicensed dispensaries that are currently operating.  "There are a number of issues. The (original) act makes no provision on how you're supposed to get seeds or seedlings for what you're supposed to grow, so there's that kind of original sin."

 

Additionally, Mains said equipment to grow marijuana is expensive and potentially dangerous. As many patients suffer from debilitating ailments, they typically need to find someone to grow it for them.

 

"There are unscrupulous people out there. Some may not be able to grow properly, or some may take your money and not give you anything, so you have no access to the product," Mains said. "In light of that, you had dispensaries crop up."

 

Despite being ruled illegal in 2014 by the state's Supreme Court, dispensaries have continued to proliferate in Michigan.

 

"The free market has created a system that is clean, where someone can go in and talk to someone who is knowledgeable. They can talk about what strains might be best or what dosages. Stores have a variety and array of products," Mains said. "Not products that are designed to get you high, but products that have an array of benefits."

 

Because current dispensaries are technically illegal under state law due to that Supreme Court ruling, LARA earlier this year recommended all unlicensed dispensaries be closed by December 15, when the department begins accepting license applications. Further, the department said those that continued to operate after the December 15 deadline would risk having a license application denied for operating outside of state law. And, because LARA isn't expected to begin issuing licenses until April and growers will need months to establish a crop, there are concerns that patients will have no access to much needed medication.

 

To address the issue, state Senators David Knezek (D-Dearborn Heights) and Rick Jones (R-Grand Ledge) introduced a pair of bills that would extend the closure date for current dispensaries and protect those operating them.

 

Jones, a former sheriff, said he was initially against legalizing medical marijuana in the state, but after spending a lot of time investigating its usefulness, has changed his mind. That, he said, includes patients who were able to stop using opiates due to medical marijuana, its ability to reduce seizures, and help with the relief of some cancer symptoms.

 

"The genie is out of the bottle. Now, what do we do between December 15 and as many as nine months later if you don't have any dispensaries out there, and somebody is in great need?" Jones asked during an October 10 committee hearing on the bills. "I think what will happen, with my police experience – I believe if you simply shut them all down, it's going to go underground. You're going to have grandpas and sons trying to find marijuana to save grandma. It's going to be a mess. You're going to criminalize people that don't need to be criminalized."

 

As proposed, dispensaries wouldn't be penalized if they apply for a license by February 15, 2018. The bill has been opposed by the Michigan Responsibility Council (MRC), which represents potential growers in the new licensed marketplace.

 

"The illegal dispensary market has completely distorted the caregiver model, making patients dependent on illegal dispensaries. Action was taken and bills passed that created the new act. And the driving intent of the Senate, and I was involving in pushing this through the Senate, was to drive out the illegal activity and create an above-ground marketplace," said Steve Linder, a MRC lobbyist. "We find these bills – that fly in the face of the intent of the law, hasn't even written its rules yet and gone into effect – jaw dropping. Senate Bill 299 basically gives those operating an illegal dispensary a carve-out to those who are knowingly breaking the law. The licensing act also spoke very loudly about doing background checks. Why do we care about what happened to somebody 10 or 15 years, or 20 years ago, if we are going to reward those who are currently conducting illegal activity right on the main streets of our state."

 

Senators Jones and Knezek rejected Linder's claims, insisting the bills have patients' best interest in mind, while questioning the MRC's motives as being motivated by business.

 

"Mr. Linder, would you mind telling us what millionaire you work for, who you're lobbying for, and who it is that wants a monopoly in this business because we can all see through what is being said," Jones said.

 

Linder declined to answer the question.

 

Knezek also said he felt opposition to the bill was based on big business and not the best interests of patients. 

 

"The problem comes when there is money involved in all of this," he said. 

 

On November 1, LARA put in emergency rules allowing current dispensaries to avoid facing penalties about license considerations if they were operating with approval from a municipality prior to December 15, 2017, and submitted a complete pre-qualification application by February 15, 2018. Those continuing to operate past December 15 must either obtain a license or close by June 15, 2018.

 

Jones said after LARA's announcement that his bill is no longer needed. However, he said he would be in favor of bills that represent patients interests and avoid giving any businesses unfair advantages.

 

"The intent of the legislature was that no monopolies be created. That the growers, the licensed growers of the future and dispensaries would compete like anybody else," he said.

 

Businessman Tom Celani, who serves as chairman of Michigan's Responsibility Council, said requiring dispensaries to close prior to any licenses being issued would create an even playing field. He said the biggest obstacle to those who want to get involved is that marijuana is still illegal in the eyes of the federal government.

 

"There's still an issue of it being a Schedule 1 drug, but a lot of people in town are asking me questions because I'm involved in the politics," he said. "Personally, I can't be involved (in the licensed businesses) because it's a Schedule 1 drug. It's a serious issue for this country. I don't know any other business that has gone on like this. It's over a $10 to $15-billion industry. There's no reason that it shouldn't be taxed, regulated and understood."

 

Celani said those drafting Michigan's regulations are likely looking at other states, such as Colorado, where requirements were more lax and businesses failed too soon after opening. He said Michigan should look at the number of patients to determine the number of licenses it will issue.

 

"If you look at Ohio, they have an overabundance of grown marijuana," he said. "That ends up on the black market, and that's a problem. Ohio and other states are looking at the number of patients and the number of growers, which would be the responsible thing to do."

 

The Medical Marijuana Facilities Act specifically states that the regulation board can't create a rule limiting the number of types of facility licenses that may be granted. 

 

Overall, Celani said the regulations are the right step for Michigan and the medical marijuana industry.

 

Josh Hovey, spokesman for the Coalition to Regulate Marijuana Like Alcohol, said in early November that the coalition had about 98 percent of the 360,000 signatures it hopes to collect to allow voters  in 2018 to consider whether recreational marijuana use should be legal in the state. He said the group already has more than the 252,000 required by state law.

 

"We mirrored licensing language similar to what the state legislature passed for medical marijuana," he said. "It's logical to assume that what LARA is doing now to regulate the medical marijuana business will be similar to their rules for adult use marijuana."

 

One difference, Hovey said, is the desire for the ballot initiative to include a "micro grower" license, which would allow for up to 100 plants to be grown, processed and sold at one location, similar to a brew pub. The micro grow license, he said, would allow caregivers to expand into the adult use market. 

 

If the issue is approved by voters, Hovey said it's likely the state will still be operating under the emergency rules for medical marijuana, which could be updated to ensure any differences are ironed out.

 

Suzie Mitchell, who started Michigan's Responsibility Council with late Republican strategist Paul Welday, said the council was formed to help form regulations around the medical marijuana law and business. Neither she nor Celani would comment on members who were hoping to get into the industry, but said the group represents large growers.

 

"They are in other industries that are federally regulated and don't want to jeopardize their other licenses," Mitchell said about business owners still hesitant to enter the medical marijuana market in Michigan.

 

Mitchell said it's important the regulations allow stacking of Class C grower licenses to ensure there isn't an overabundance of facilities which could be difficult to monitor, and to ensure large growers can scale up investments.

 

"We represent large growers, or those who want to be large growers. That's what we decided to do when we got together," she said. "They want to have 1,500 plants. They want to be Class C license holders, and they want to have the opportunity to stack licenses. It's costly to set up to grow, and if you do that, you want to be able to scale up."

 

Overall, Mitchell said she doesn't feel the Medical Marijuana Licensing Board and LARA are making regulations that are favorable to any one group. McCormick, with the Michigan Cannabis Development Association, agreed.

 

"Big businesses need the entrepreneurial spirit that comes with a good idea. You need both for the market to be successful," McCormick said. "As it stands now, it's pretty equal.” 

 

Whether or not the state's regulations favor big business is open to debate. However, there's little debate as to big businesses's interest in the medical marijuana industry.

 

Canadian-based Constellation Brands, which owns Corona, Modelo and other beverage brands, announced in late October a $181 million investment to acquire a minority stake in Canopy Growth Corporation, an Ontario-based medicinal cannabis product producer. Because medical marijuana is legal in Canada, the country's banking institutions don't have to restrict funds from the industry, unlike the United States.

 

Closer to home, some specialized vendors have expressed some interest in getting involved in Michigan's industry. However, whether that interest will develop into action remains to be seen. 

 

"When it first came up, we had a discussion about it, but as it has unfolded, it's much bigger. It's really like nothing we do in the tobacco world," said Polly Reber, president of the Michigan Distributors and Vendor's Association. "There are so many parts and pieces to it, it's not the same business that we are in.

 

"In our business, we purchase product from a manufacturer and it's shipped to warehouses, then retail orders. We do everything, not just tobacco. And, we collect the state's excise tax on that. That's $1 billion in revenue... this is really nothing like what we are doing."

 

Locally a number of names of business people have been kicked around as having an interest in the promising medical marijuana business,  including reports that the folks behind the Smokers Outlet chain may want to become a player in the field. Political contributions filed with the state of Michigan reveal business interests in expanding the state's marijuana market. Among the top donors to the coalition's campaign is Troy-based Smoker's Outlet Management, which gave $50,000 to the current legalization campaign. 

 

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