Is The Future Bleak For Marijuana Industry In Michigan?

A Pew Charitable Trusts' study predicts underwhelming response to marijuana legalization for recreational use in Michigan. The US state estimated to mint $1.4 billion-$1.7 billion in annual sales but market researchers are skeptical about the market uncertainties.


They have cautioned the policymakers of market uncertainties that plague the market and may dampen the spirit of the staunch supporters. 

Some of the areas of concerns hovering Michigan’s Marijuana Industry include

  1. Unprepared Regulatory Model

First and foremost, Michigan has a dual-licensing system. Thus, every trader has to apply for a license from both the state and by the city/county where they are operating the business.  Having failed to comply with either of them deprives you of the right to legally sell marijuana in the state. 

Proposition 1 affirmed that the regulatory landscape need not be complicated like California’s that can prohibit people from ethical trading practices. In fact, it had sent a clear directive to the Michigan DLRA for: 

  • No limit on the number of licenses 

  • Avoid creating impractical rules discouraging interested parties 

 There is only one regulatory unit overlooking the entire operations and functions to avoid replicating the complexities in California’s model.  

2. Grey Or Black Market 

 This is one prominent concern that is hard to ignore. Despite the legalization, there exists a black or grey market that sells marijuana at a cheaper rate than paying high taxes.  

A lingering fear is if Michigan just like its peer state California embraces the high-cost structure for legal marijuana that instead of attracting, pushes away growers, distributors, sellers, and buyers.

The black marketers must be encouraged with tax incentives or exclusive offers to join the legal market and support the state.  

3. Not For Small Businesses? 

 As marijuana is bracketed illegal drug by the federal government, the signature banks will not fund genuine traders and aspiring entrepreneurs. This adds to the financial woes of the hazy marijuana market in Michigan.  

Additionally, it's a high-end market wherein the companies do not enjoy tax breaks like any other industry.  Thus, many small businesses are likely to shun the legal market and support unethical practices to sell marijuana.  

For progressive changes, financial institutions need to 

  • Regularize the market liquidity in the marijuana market 

  • Collaborate with the Michigan DLRA

  • Centralize the financial system to prohibit malpractices

The good news is that the Marijuana Regulatory Agency has discarded the high capitalization costs in Michigan. This is a positive step towards easing things for the people who want to go by the rules of the books! 


What Lies Ahead For Michigan’s Marijuana Industry? 

 Michigan has opened the doors for legalized recreational marijuana for adults ( age>21) from Dec 2018. The state is slated to earn a 6 % sales tax along with a 10% excise tax on all legal marijuana purchases.


The state's Senate Fiscal Agency predicts a tax revenue of $180.9 million in the year 2020-21 but the tax sins are hard to calculate. It's a wait and watch situation for the policymakers. 

While the discourse continues where it will work or not, the Michigan Department of Licensing and Regulatory Affairs (DLRA) is refining the policies to make it easy for the participants. 

In all likelihood, the marijuana dispensaries will start opening up by the end of this year and early 2020.  For those looking to grow weeds anywhere in the state, a fully-insured, and secure marijuana transport service can help navigate all the challenges and apprehensions in Michigan.