Recreational marijuana rollout in Michigan could be national model for how not to do it, industry insider says

[Canniseur: The cannabis industry in Michigan been plagued by issues going back to the medical-only cannabis market. Lack of supply is the first issue. Second, the commission charged with the task of running Michigan’s cannabis programs shows their incompetence. Michigan is not ready to sell recreational cannabis. There aren’t enough outlets and there isn’t enough inventory to supply the state. The saddest part is there are several good models and one that’s already in Michigan; alcoholic beverages. There are some successful state adult-use cannabis programs as well that can easily contain elements in Michigan.  Colorado, Massachusetts, and Washington state all have programs with many good features. Why the commission won’t look at these programs and copy the best parts is beyond us. Maybe it’s a NIMBY thing. Maybe it’s self-righteousness. Perhaps it’s arrogance. Who knows? The commission needs people who aren’t afraid to look at what works elsewhere and implement it. Right now Michigan is a mess. My prediction? In the near long-term, the black market will be the winner.]

Michigan’s rollout of legal adult-use recreational marijuana this month was “not well thought out” and will likely further exacerbate an ongoing shortage in legal marijuana product, the executive director of a group representing nearly 200 licensed medical marijuana businesses said Friday.

During an interview on WKAR’s Off the Record Friday morning, Michigan Cannabis Industry Association Executive Director Robin Schneider said the Marijuana Regulatory Agency’s decision to move up retail recreational market sales from spring 2020 to Dec. 1 was an unwelcome surprise for many in the industry.

“Unfortunately, I think Michigan is going to become the national model of how not to roll out an adult-use program,” she said on the show.

The state licensing agency had previously planned to require product destined for the recreational market be grown from scratch, meaning it would take at least one grow cycle — until March or April — before harvested marijuana could be sold at retail locations.

That changed when the Marijuana Regulatory Agency issued a rule making it possible for businesses that already have marijuana product grown or acquired under its medical licence to transfer it to the recreational side beginning Dec. 1.

Schneider said due to initial roadblocks in approving growing licenses and ongoing bottlenecks in the testing process, the state is 10 times behind where it needs to be for production to fulfill the needs of the market. That could become an even bigger problem soon, especially for medical marijuana patients, she said.

“We have such a shortage of product right now – our state is already at risk of running out of cannabis completely due to the early rec sales,” she said, later adding: “We might be sending patients back to the illicit market before this is over.”

Had the state stuck to the original schedule, Schneider said the industry would have been better prepared for the demand, and likely would have brought in more than the $1.6 million in sales posted during the first week of recreational marijuana in Michigan.

“We should have done much better than that,” she said. “That’s not anything that will give us bragging rights…it was not rational, it was not well thought out, it was not well prepared.”

Agency spokesperson David Harns said the state has to balance the need to make sure patients have their medicine and implementing the will of the voters.

He said the initial rollout was meant to be a small, measured soft opening, and noted marijuana businesses are not required to move medical product over to recreational: “It’s just an option for those who want to take advantage of it.”

Harns said the influx of demand for adult-use marijuana was expected, and said the state continues to license growers for both medical and adult use.

“Whenever the adult-use market turned on, there was always going to be a shortage,” he said. “It will be a matter of time until the market stabilizes.”

State budget officials are projecting recreational marijuana to become a $1.5 billion-per-year industry by late 2021. The $1.63 million in sales that came in during the first week translates to nearly $270,414 in tax revenue for Michigan between Dec. 1 and Dec. 8, including a 10 percent excise and 6 percent sales tax.

Since recreational sales became legal Dec. 1, heavy demand has led many marijuana shops around the state to institute purchase limits, and one shop ran out of product after serving 750 customers in two days.

See where marijuana businesses are licensed in Michigan:


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