Michigan Cannabusinesses Have Arrived: History and 2019 Market Overview
What is a cannabusiness?
A cannabusiness is a business that sells cannabis or cannabis-related products. Since Michigan passed recreational cannabis for adult use in 2018, reports expect Michigan’s pot market to rival Colorado’s due to how generous the law is in weight and quantity limitations for both end user and commercial facilities.
Medical marijuana began in 2008 during the passage of Proposition 2, which allowed patients and caregivers to be licensed through the state's Dept. of Health; provisioning centers (retail dispensaries) and manufacturing facilities soon followed. Members-only small businesses quietly opened. Home occupations and personal grows discretely started in basements, garages, and pole barns. Due to the law being vague and failing to provide specifics for the retail and distribution of marijuana, some commercial property owners and property managers initially refused to lease to medical marijuana businesses. Concerns had also been voiced in residential transactions.
Several local municipalities created ordinances to handle things like zoning, inspections, and licensing for the budding facilities along with moratorium ordinances to prohibit them from opening in certain areas.
The recreational component was added to the law in 2018. At the time of this posting (summer 2019), cannabis provisioning centers in Washtenaw County are popular, well-advertised and visibly marketed. Local municipalities have begun issuing manufacturing licenses for discrete, secure facilities which have tended to avoid notice. Local cannabis dispensaries have spurred extensive renovation and new construction projects, and some property owners have seen value appreciation based on new, more valuable uses creating higher projected valuations and driving investment. The state has been working to implement the new consumer law but the state's licensing and other delays put most expectations around 2020 for over the counter marijuana.
The Big Picture
Projections have suggested that Michigan's marijuana current marijuana business will generate $1.4 - $1.7 billion dollars in revenue. State and area municipalities plan to raise taxes from licensing and taxes-- and a white market industry for the product should also lend towards tourism and increased residential and land resale values.
As the real estate market was rebounding over the next decade, Michigan cannabis businesses were investing into the community and growing and improving their facilities to expand operations to create readiness for the coming recreational cannabis laws. Notable examples would include The Patient Station, a cannabis dispensary which was built out of a long-neglected former gas station in Ypsilanti. Another Ypsilanti dispensary in the historic downtown has undertaken a structural overhaul and made significant renovations to an adjacent property (the former Ypsi Bike Shop) for future dispensary use: Herbal Solutions -- the construction of their rooftop garden can be seen downtown.
Michigan Residential Cannabis Real Estate
Residential home medical cultivation has seen a significant increase over the past decade of legalization. We've toured many of these properties, seeing home occupations in Ypsilanti condos and Saline townhouses, Ann Arbor homes, garages, pole barns, etc.
With commercial properties, value-add, rehab and construction projects, it's always important to consider knowns and unknowns and understand all your risks before jumping in. Municipal ordinance review may also be required, and if the municipality hasn't created ordinances addressing medical marijuana than it may be necessary to reach out to an appropriate local council member, zoning, or planning official. As commercial licensing became adopted by the state, banks soon followed and now offer banking services to these licensed businesses.