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How Michigan hopes to make small marijuana business ownership more accessible
Sun Provisions in Decatur is a little, family-owned marijuana shop with an extraction lab in the back.
The display cases feature six brands of flower, a couple rows of vaping cartridges and few flavors of gummies. There’s a 150-plant grow and trimming area in the basement.
Everything is done in-house. It’s one of only a few marijuana microbusinesses that exist in Michigan.
“It’s been a struggle,” said Helen Sun, 33, Sun Provisions operations manager and daughter of the owner. “We came really close to having to restructure, but we were able to squeeze by and make it from one harvest to another.
“I think we’ll be OK, but the difference between feast and famine is going to be allowing us to grow and do more.”
Michigan marijuana regulators say they want the industry to be inclusive -- a place where an average entrepreneur can thrive -- not just a playground for corporate money and deep-pocketed financiers.
This is why the so-called microbusiness license was created, but nearly two-years after its inception, only a few exist. With some tweaks, the Marijuana Regulatory Agency in its most-recent proposed set of rules hopes to change that. The agency has created what is called the “class A microbusiness” license.
The license type would create what many believe is a more economically feasible business model by doubling the allowable plant count to 300. It also permits microbusinesses to purchase or acquire mature plants from licensed growers, registered caregivers or patients, and purchase ready-to-sell edibles, concentrates, vaping cartridges and other non-flower products from licensed processors, all of which is forbidden under the initial microbusiness rules.
One tradeoff: businesses like Sun Provisions would no longer be allowed to do their own in-house processing, unless they also acquire an additional processing license.
So far, seven of the original microbusiness licenses have been issued, but only about three have actually opened their doors to customers.
With the current unique, self-contained, seed-to-sale microbusiness setup, some communities have been reluctant to allow licensing opportunities, and there are claims within the industry that the business model is difficult to make profitable.Sun said her family’s seven-person operation, due to the grow limitations, has come dangerously close to entirely running out of THC products on multiple occasions since opening in March.“The challenges we’ve heard about the existing microbusiness are twofold,” said Marijuana Regulatory Agency Director Andrew Brisbo, who discussed the proposed new microbusiness license during a panel at the National Cannabis Industry Association Midwest Business Conference this week at the TCF Center in Detroit Thursday.
“The first is that there was not enough biomass to be sustainable, not enough plant material or plant count. And the second was that it’s incredibly expensive to set up the processing part of it, which you have to have a variety of products to be successful ...
“And by eliminating the processing piece altogether, it eases the regulatory burden as well as helps us keep the costs a little lower.”
Sun said her mother invested heavily to build their processing capabilities and she hopes that the business can be grandfathered under the new licenses type, if approved, to continue in-house processing with the elevated plant count.
“We bought everything, we built this out, we built to the (Marijuana Regulatory Agency) specifications and it sucks to learn ... that this is not enough, and to have to struggle,” Sun said. Chris Jackson, the government and legislative affairs and social equity lead with Sticky cannabis company, participated in the panel discussion with Brisbo on Thursday.
“Assuming that the rules stand, they haven’t created a pathway yet for current microbusiness owners to be able to transition into the new license type,” he said.
Jackson talked about a microbusiness concept that is currently forming called the “micro-mall.”
It’s “where you have multiple microbusinesses in one space and they have shared costs, versus everyone has to do it themselves, pay their rent or franchise fees,” Jackson said. It would be like a marketplace with a separate licensed social consumption lounge on site for customers to smoke or ingest their purchases, he said. The first such operation is expected to open in Muskegon within the coming year, Jackson said.
The proposed rules that would create the new class A microbusiness are available for review and the Marijuana Regulatory Agency is accepting public input through Sept. 27.
Once a set of rules is finalized and approved by Marijuana Regulatory Agency director, they will require approval by the Joint Committee on Administrative Rules (JCAR) before becoming law.
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