It seems like every other day, and there is a new, legal marijuana market popping up somewhere, somehow. However, that is not the case when it comes to the wholesome state of Michigan. In fact, and hindsight, Michigan might be one of the earliest adopters of the cannabis industry. The first to reap the benefits of the illustrious plant, Michigan turned itself into the Sweet Leaf Capital.
As with every new industry, whether it be something as complex as technology or as simple as a plant, there will always be hesitant people and people who are flat-out bearish about the entire ordeal. But then you have those eager to jump at the opportunity. And without question, Michigan has reaped the rewards of being an early adopter. Especially one as promising and opportunistic as the cannabis industry. From the legalization of Cannabis comes an abundance of economic activity and economic sub-sectors, like cannabis real estate loans, cannabis equipment financing, and much more.
That is one point of view of how Michigan has utilized its bold move toward legalization. But of course, there are other aspects as well. Here is everything you need to know about Michigan’s Marijuana Market.
The Market Keeps Growing
Of course, the first thing on anyone’s mind is, “how is the market doing?” Like many other states, cities, or countries that have legalized cannabis, Michigan quickly saw demand outstrip supply. Michigan’s recreational market grew at a record-fast pace.
In 2020 alone, the state of Michigan generated $400 million to $475 million in sales. Even with the onslaught of the pandemic, Michigan could still navigate the obstacles and maintain the hefty sales volume.
This isn’t a fluke, and the sales aren’t expected to slow down. But in fact, they are expected to keep growing, with estimates putting sales numbers to reach $1.9 billion to $2.4 billion by 2024. That is almost five times the market growth rate. As more and more consumers, customers, and even market players transition from the illegal market of Marijuana to the legal one, these numbers and statistics are only expected to grow.
A Need For Cash
High Life Farm is Michigan’s largest and oldest cannabis cultivator. High Life Farms owns and operates a 6,000-plant grow facility and striking deals with several converted licensing agreements with popular Cannabis plants. This need and urgency to increase the supply to meet the demand will, without a doubt, lead to more and more financing tools for this market. As cultivators, farmers, and dispensaries look to continue growing and expanding, they will look for ways to finance this growth.
Currently, financial institutions like banks and funds are not allowed, even prohibited, to deal with cannabis firms. They are also not allowed to accept electronic payments, cash, checks, or any payment from cannabis businesses. Some cannabis entrepreneurs say this requires cannabis companies and individual professionals to have large-scale capital on reserve if need be. Currently, the cannabis industry is outside the financial system looking in.
However, recent legislation being passed on the federal level could change that situation. If that were the case, cannabis business owners could apply for several forms of loans. We could see the birth of cannabis real estate loans, cannabis equipment lending, and other forms of cannabis working capital loans. This opening up to the cannabis industry will only fuel its potency and growth.
A Friendly State
The success of marijuana in Michigan, making it the sweet leaf capital, was not an overnight success or a fluke. The road to cannabis prosperity was long and bumpy. Michigan first legalized marijuana for medical use back in 2008. This early adoption and investment in cannabis paid off in the long run. Until today, Michigan is often called the closest to California in the Midwest. A point meant to compare an up-and-coming example to the ideal scenario.
All this could not have been possible if the state of Michigan was not supportive of marijuana, its usage, and its legalization. Several CEOs of companies in Michigan lament the state’s regularly powerful performance in adapting to the times and accepting the benefits of marijuana. Some also credit Michigan’s Marijuana Regulatory Agency for the success that Michigan has had with the cannabis plant.
No matter how you slice it and dice it, Michigan has set an example, a blueprint for how to best go about the legalization process. It’s best to split the process into incremental steps and milestones. Then it’s best to galvanize the support of the entire state, not just the governing bodies. After all, the most prominent financiers will be the constituents of that state. Then pave the way towards recreational use and allow the market to partake in healthy competition. These are some of the crucial steps a state should take when considering the legalization of cannabis.
The Bottom Line
Cannabis is likely to have a massive future in several industries across the board. All around the world, cities, and countries are rushing toward legalization efforts for their reasons. Some are handicapped economically and can use the sweet leaf capital generated from the cannabis plant. Others are eager to experiment with the psychological and physical benefits of the plant and further enhance its medical capabilities.
As for the Midwest state of Michigan, it was always big on cannabis. One might say the very first marijuana advocates. Their legalization efforts stem from 2008. It has been a long road filled with promise and prosperity. Of course, the boatloads of profits they have been able to sustain year in and year out are pretty good—especially considering that they have skyrocketed to a billion-dollar market. Ultimately, there is no debate that the future looks green for Michigan.