Marijuana is a Growing Industry in Michigan
Michigan has become the first state, not on the east or west coast, to have legalized adult marijuana use. This is a huge milestone for the Midwest.
We address frequently asked questions revolving around this popular topic.
What exactly is this new law and how did it come to be?
In 2008, a voter initiative passed the first Medical Marijuana Act which allowed caretakers to provide patients with medical marijuana. In 2016, Governor Snyder signed the Medical Marijuana Facilities Licensing Act which is when commercial real estate brokers were able to begin helping clients look for grow operations, processing operations or dispensaries The third law, passed in 2018 was the Michigan Regulation and Taxation of Marijuana Act. This took effect December 6, 2018 and legalized the recreational use of marijuana in Michigan however, the state has until December 6, 2019 to write the rules for this voter initiative.
How will this effect the economy?
The cannabis industry is creating job growth and business development in many sectors including the legal and banking fields, real estate, marketing and advertising, insurance, construction, manufacturing, customer service
and technology. Michigan is projected to net $130 million a year in new tax revenue and by 2024 have created a $800 million industry employing 250,000 residents.
There is approximately 297,515 card carrying medical marijuana patients currently in the state of Michigan.
How many are licensed in the state of Michigan?
Out of the 532 complete license applications the state received last year, the state’s licensing board reviewed 138 from July to December. The board approved 99 and denied 39 licenses. As of Jan. 8, 2019, there are 50 provisioning centers with active licenses spread across the state.
When would retail sales begin?
Retail sales are projected to begin in Michigan in 2020, according to industry sources.
How does hemp differ from marijuana?
To date, forty-one states have defined industrial hemp as a product type and removed barriers to its production. Although hemp and marijuana may share similarities, they have several very distinct and critical differences.
Because Marijuana is abundant in THC, it is naturally grown for its psychoactive properties, whether it be for recreational or medicinal use.
Hemp, on the other hand, is primarily used for industrial purposes as it is capable of producing hundreds of resources such as paper, clothing, building materials, biofuel, food products, oils and more. With the fast-growing popularity of CBD across the globe, hemp is also used to produce a wide variety of THC-free CBD products. Because Hemp naturally contains very little THC, it is legal in most parts the world and where it is not, the legal consequences are minor.
What does this mean for future legalization in the U.S.?
Thirty-three states and the District of Columbia currently have passed laws broadly legalizing marijuana in some form. With Michigan taking the lead, it’s possible other Midwestern states will follow including Illinois, Ohio and Missouri. Bipartisan support for legalization will only continue to grow as more red states get on board. A data analysis study shows that if marijuana was legal in all 50 states, this would create a combined federal tax revenue of $131.8 billion between 2017 and 2025, illustrating a bright economic future.
We are here to help guide those looking to get into the business and purchase a property as well as those eventually looking to sell these valuable assets.
Jim Ringler — Senior Broker, NAI Cressy