Months after recreational cannabis sales started in Michigan, sales are booming with the Marijuana Business Factbook estimating the state’s 2020 adult-use sales will total between $400 million – $475 million, growing to $1.9 billion – $2.4 billion by 2024. Michigan offers a variety of license types for the adult-use market depending on the size of the business and until very recently, the state hadn’t yet awarded a cannabis microbusiness license.
This is a type of license that allows a single business to grow its own supply of up to 150 plants, process, package, and sell the final product to customers. This week, Michigan’s first cannabis microbusiness license was awarded Sticky Bush Farm, a company based in Presque Isle County’s Onway. The license is usually meant for small businesses that aren’t allowed to interact with the rest of the licensed cannabis market. This means they can’t acquire marijuana or marijuana products from outside growers, processors, or retailers, and may not sell any products to other marijuana retailers or dispensaries.
“This is a complex license type incorporating the functions of three other license types,” says Marijuana Regulatory Agency spokesman David Harns. “The license type also presents a challenge to municipalities as to zoning because of the diversity of the function occurring in a single location.” According to Onway City Manager Kelli Stockwell, the road to processing and awarding the license to Sticky Bush Farm was long. There were two microbusiness licenses up for grabs and while the owners of Sticky Bush Farm approached the city last year, no one has submitted a request for the second license.
As of early August this year, the Marijuana Regulatory Agency had received only one complete application for a microbusiness license. “Here’s this license type that was put out for small-business owners, minority applicants, and social equity applicants and you’ve had zero applications,” said Dan Russell, a consultant working on behalf of Tranquility Fields at the time. This can be attributed to Michigan’s existing marijuana licensee rules which applied a permit’s plant limit to those that are mature, which is defined as rooted plants 8 inches or longer, regardless of whether the plant is flowering or not.
According to Russell, this means that eventual microbusiness licensees may not get an opportunity to operate a truly viable business. “If it’s defined as 150 ‘mature’ plants, it now means a microbusiness could have 75 in flower and 75 in a vegetative state, which really doesn’t create a viable business for any small business owner.”
It is believed that larger cannabis companies like Sugarmade, Inc. (OTCQB: SGMD) will be observing to see how the microbusiness model pans out in the long-term.
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