Michigan’s lessons for Minnesota on legal cannabis
Minnesota wasn’t the first state to legalize marijuana, not even the first in the Midwest.
That distinction goes to Michigan, well before Minnesota this week became the 23rd state where it’s legal for adults to use cannabis.
Michigan legalized medical marijuana in 2008 and then legalized adult-use recreational marijuana in late 2019. The state has dealt with growth, and some growing pains, in its marijuana industry since then.
It’s not hard to buy cannabis in Michigan.
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At the Arbors Wellness marijuana dispensary in downtown Ann Arbor, you walk to a side door of the old brick house, show your government ID to a camera outside, and the door unlocks.
Inside, security is relatively tight, the vibe is laid back and it’s quite busy, even on a Thursday afternoon.
Behind glass-encased counters, there are edibles, flowers, pre-rolled joints, tinctures, vaporizers and concentrates. Consultants behind the counters help customers, asking what kinds of highs they are looking for.
In other words, it’s a lot like any other retail business.
“It’s a significantly larger market [than the medical market],” said Thomas Lavigne, an attorney and partner at the Cannabis Counsel, a law firm in Detroit. “And then also the out-of-state people who are enjoying cannabis, as tourists here in Michigan, that’s a whole added market. So it’s really increased the opportunity and increased our business.”
In 2022, there were $1.8 billion in marijuana sales in Michigan. And that generated around $200 million in taxes for the state, part of which gets distributed to schools, counties and cities. Also, each city gets $52,000 per dispensary.
Before legalization, some had worried about the effect it would have on crime.
“That was a huge concern for public safety, that there would be an uptick in traffic accidents, there would be an uptick in criminal behaviors, etc.,” said Jerald James, the assistant executive director of the Michigan Association of Police. “But it just has not panned out to reflect negatively at this point.”
James said one large legal hurdle is driving while intoxicated, which at this point is tough to prosecute because there’s not a reliable chemical test to give roadside to tell if somebody is high in the same way breathalyzers can detect alcohol in the bloodstream.
Another big wrinkle in state legalization is that it is a heavily cash business because banks can’t handle marijuana money under federal law.
That can make dispensaries targets for robberies. The state issued warrants earlier this year for a group of 12 people involved in more than 20 dispensary break-ins.
Until the federal government steps in, there are steps a state can take to address that issue, Lavigne said.
“My advice to Minnesota is to create a state chartered bank who will deal in the state legal industry to try to prevent those sorts of issues, because there has been crime due to it being largely a cash business,” he said. “We are lucky here in Michigan, we do have a few local banks and credit unions who are willing to take on the added administrative headache that’s required under federal law.”
The new market has attracted many people, sellers and growers. That competition has made it tough for some retailers to pay down debts and slimmed their profit margins. Recently, one of the state’s largest cannabis companies went into receivership because of debts.
According to state data, an ounce of marijuana flower cost $410 in May of 2020, in May of 2023 that same ounce cost $91.
“Prices have gone down so, so, so much,” said Patrick Shepard, the manager of Arbors Wellness. “You would leave a dispensary with maybe about five products, and it would maybe be close to $500, where now you can leave with a handful of pre-rolls that used to be all priced at $20 for just a gram, and now they’re all $3. So it’s a lot more affordable. Which is good.”
Another benefit of legalization has been the safety, Shepard said, because products are tested and have to meet state guidelines.
“The best part about a dispensary is that everything’s tested,” he said. “So you can ensure that it’s safe to consume.”
Outside of Arbors Wellness, a DJ played on a Thursday afternoon while two customers sat at a table.
As James Moon rolled a joint, he said since legalization he’s not as fearful of police when he’s driving around.
“Riding around the state with weed I feel a lot more confident like going to different cities with weed on me than I did before,” Moon said. “Just because I know it’s a state law, so it’s not so big of a caution anymore.”
Moon said he’s seen some changes as the industry has grown and evolved in Michigan. He had a tip for anyone looking to buy marijuana when dispensaries open in Minnesota.
“Trust your nose, trust your eyes and your judgment,” Moon said, adding that there are gradations in quality. “Just because it’s legal doesn’t mean it’s good.”