Anybody who was worried about "Big Marijuana" in Michigan can go ahead and get alarmed, because here it comes. Although modest (we'll see if that changes in a few years after the federal government deschedules the stuff and bank financing is available), the wheeling and dealing shows that big money is deep in the game.
No other single entity shows as much ambition as Green Peak Innovations LLC , the largest holder of Class C cultivation licenses in Michigan. Each of the company's 12 licenses allows for up to 1,500 plants. That's 18,000 for each grow cycle. Green Peak holds a processing license and has just announced $30 million financing that will allow it to open a planned 19 provisioning centers across the state. That means one or more entities just cast a $30 million bet that Green Peak is going to make some money.
Another recent deal has nationally known Dixie Brands soon to sell its THC-infused gummies, flavored elixirs, pressed pills, mints, and tinctures, as well as its THC- and CBD-infused topical balms in Michigan. Dixie sells those products and more in California, Colorado, Maryland, and Nevada. Out-of-state products are officially hitting the shelves in a big way.
Even in the small community of Vanderbilt, where approximately 200 voters will decide whether to allow marijuana businesses in August, supporters are thinking big. Initiative language calls for allowing two safety compliance facilities, two secure transporters, five micro businesses (grow, process, and sale in one facility), two retailers, two processors, and three each Class A, B, and C growing licenses. That's a total of 22 marijuana businesses in a town with a population of under 600. Clearly some folks in Vanderbilt envision themselves as a potential cannabis powerhouse for the central upper area of the Lower Peninsula. They may have to compete with Harrisville, about 100 miles east on Lake Huron, which has just opted in to the state recreational system.
This kind of stuff is happening more and more often, so it's no surprise that marijuana businesses are also fighting among themselves in what is so far a struggling market. That became apparent last week when a Detroit Free Press story revealed that a group of marijuana organizations plans to propose legislation that would make gifting marijuana illegal, toss out the caregiver system, make home growers register any heavy equipment they use, allow currently unlicensed medical marijuana outlets that are now open to remain open through 2019, allow currently open stores to immediately start selling recreational marijuana, and a few other issues.
This would fundamentally change the medical marijuana system as it has functioned for more than a decade, and affect provisions of Prop. 1. Those proposed changes have little chance to pass, however, because changes to the medical marijuana law require 75 percent of legislators rather than a simple majority. The fact that a significant group of industry insiders are ready to back such a long shot underscores the stakes and what people are willing to do to win. Prop. 1 has barely seen the light of day and now people want to change how it's operating.
At this moment there are a fair number of people who have sunk a lot of money into getting their businesses started. Due to a number of reasons, the legal market has not taken off yet. Some of that is the state's fault, and some of that is just the industry's growing pains. And some of it is the frustrating reality that there will be winners and losers as things shake out.
The proposed legislation gives a leg up to those who are already in business. For one thing it eliminates caregivers who, it turns out, compete with licensed growers and provisioning centers for customers. It gives licensed retail outlets an advantage by allowing them to immediately sell recreational marijuana, ahead of anyone who has actually applied for a recreational license. Many medical marijuana business owners have been reluctant to open their mouths about the prospects for recreational sales, but they pretty much can't wait for recreational licenses to be granted by the state.
This proposed legislation is one indicator that they want to tap into the larger market of recreational marijuana. They want it before everyone else has it. They want to get rid of caregivers so that people have to get it from the licensed businesses. This is a big money move by people who currently have an inside track with storefronts already open. People ask them all the time, "where can I buy recreational marijuana?" For the moment, the answer to that question is, "from your black market dealer."
A compelling angle of this proposed legislation is that the Florida-based Minorities for Medical Marijuana and the Lake Newaygo County Chapter of the NAACP are among the groups backing it. Questions about minority involvement are a regular feature of legalization efforts. It's not clear what specific concerns this coalition of groups address, but programs to encourage minority ownership are in place in several states.
Whatever form this legislation actually takes, it won't be the last effort to bend the marijuana laws — especially since there has been little goodwill effort to make the laws work as they stand. That needs to come first before any effort to fix it.
Strange bedfellow
The fact that former Speaker of the House John Boehner has become a pro-marijuana lobbyist is a real head-shaker for activists. It's a testament to the powerful money interests that have climbed onboard the cannabis train, but activists aren't ready to give him a pass. While in Congress for 24 years, Boehner never acted on cannabis reform, and never introduced, cosponsored, or voted in favor of marijuana bills. He literally voted against a bill to protect medical marijuana states from federal interference. The Equity First Alliance, which promotes racial and social justice in the cannabis industry, was in no mood to give Boehner a pass for his keynote address at SXSW last week, sponsoring protests at his hotel and on the streets condemning "big marijuana" and social equity policies such as community reinvestment.
It does seem a shame that Boehner can walk out of Congress and into one of the biggest cannabis companies after never lifting a finger to help the cause. As Boehner told CNBC before SXSW, "It's clear this market is going to expand. And as it does, lawmakers in Washington have to look up and realize that the federal government is way out of step. It's time for the federal government to get out of the way."
When Boehner was a lawmaker in Washington, he stood in the way of marijuana for such a long time. It seems a shame that he should get to lead the parade and cash in.
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