While COVID-19 and Gov. Gretchen Whitmer’s related restrictions are taking its toll on Michigan’s economy, at least one sector — licensed recreational cannabis businesses — is reporting a spike in business.
According to the Michigan Department of Licensing and Regulatory Affairs, reported sales at licensed cannabis retailers totaled $7,913,312 for the May 4-10 week, the highest to-date since legal adult-use marijuana sales began last Dec. 12. During that first week, reported retail sales kicked off at $1,629,007.
Reported sales of recreational marijuana trended upward in the first couple months. But in the week prior to the March 24 start of the COVID-19 “lockdown’” — Whitmer’s executive order restricting travel, gatherings and “non-essential” businesses and workforce — they jumped nearly 23 percent from the week prior, from $4,705,378 to $5,777,599. Some have suggested the increase was due to users’ anticipation of the lockdown and uncertainty about being able to obtain cannabis as the virus crisis continued to unfold.
After a drop in sales for the three weeks that followed, a notable uptick happened in April when reported sales jumped 29 percent — from $4,788,920 for the April 6-12 week to $7,230,657 for the April 13-19 week. Since then, reported sales have topped $7 million each week, inching toward $8 million according to the most recent numbers available.
Jerry Millen, co-owner of cannabis retailer Greenhouse in Walled Lake, continues to report strong sales. Much of that increased demand he attributes to those now turning to cannabis products rather than alcohol to relieve anxiety, sleeplessness and other issues that have cropped up or worsened since they started dealing with the COVID-19 issue.
Many are older adults, he said.
“Some of these people are trying it for the first time, or for the first time in a long time and are discovering that there are lots of different products that can help,” Millen said. “They are trying it, and it’s working for them. They are looking for relief and a way to relax — and they’re finding it.”
Due to COVID-19 restrictions, Greenhouse has curbside sales only for now.
Robin Schneider, Michigan Cannabis Industry Association executive director, said a number of factors, including the use of cannabis as a stress reliever for some, could be attributed to the increase in sales.
“As more state licenses have been issued for recreational cannabis businesses we’ve seen an increase in production and product availability as well as increased access for consumers in areas that have more recently opened for adult-use sales,” she said. “Additionally, studies have indicated that cannabis can decrease stress and anxiety so it’s certainly possible that more consumers are finding relief with cannabis products rather than alcohol or pharmaceuticals during this difficult time.”
For the first 23 weeks of legal recreational marijuana sales in Michigan, $91,592,936 sales have been reported to LARA. This is good news for the state’s public purse, generating $9,159,294 from the 10 percent excise tax and $6,045,134 from the 6 percent sales tax.
As stated in the ballot proposal approved by Michigan voters in 2018 to legalize adult-use marijuana, the excise tax is first to be used to fund implementation, administration and enforcement of marijuana regulation, and for at least two years provide $20 million a year to research on marijuana as treatment for U.S. veterans’ medical conditions and suicide prevention. The rest is dedicated to municipalities and counties that have marijuana stores or microbusinesses, K-12 education, and repair/maintenance of roads and bridges.
As of May 12, Michigan has 216 license issued for adult-use marijuana establishments. They include:
• 104 marijuana retailers, of which 63 are approved for home delivery
• 53 Class C marijuana growers, to 34 different companies
• Five Class B marijuana growers
• Five excess marijuana growers
• 21 processors
• 13 secure transporters
• 12 event organizers
• Three safety compliance facilities
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