Michigan Has Issued Massive Number of Grow Licenses in 2021
Grown In recently reported on a massive increase in grower licenses in Michigan, such that there has been a four-fold increase in Adult-Use Class C licenses this year compared to December 2020. Class C licenses can be “stacked,” allowing growers to possess multiple licenses, with each license granting the right to grow up to 2,000 mature plants. In Michigan, “mature plants” are defined as plants in the vegetative and flowering stage. Total Class C adult-use licenses now stand at 340, translating into a potential production capacity of 680,000 plants. Class B adult-use licenses, granting the holder up to 500 plants, have increased nearly six-fold to 35.
Michigan’s medical and adult-use markets are separate systems, and as of July the medical market has more than double the class C licenses counted in December 2020. Class B medical grow licenses have jumped from five to 13 growers in the past seven months. Plant count limits for medical cannabis licenses are different from those of their adult-use counterparts, and stand at 500 for Class A, 1,000 for B, and 1,500 for C. There are now 906 total grower licenses in Michigan representing 1,402,300 potential plants.
Cannabis Benchmarks notes a significant downward trend in Michigan’s Spot price since January 2021, with prices falling by more than $400 per pound, coincident with the vast expansion of grower licenses.
MLive reports Michigan plans on expanding license types and lower licensing fees with a public hearing on the proposal planned for September 27. Schools would be granted a special license to purchase cannabis for study purposes and Micro-Licenses would be offered the ability to increase their maximum allowable plants from 150 to 300. However, unlike current Class A licenses, no in-house processing will be allowed. That said, the new Micro A Licenses would allow owners to buy edibles and concentrates from other licensed processors to sell from their stores.
The proposal would also slash license fees including application fees. Type C grower license fees would drop by $16,000 to $24,000, as would processor fees. Retail, labs and transportation fees would drop to $15,000 from $21,000. It appears Michigan wants more players in the market and that could ultimately bring down flower and derivative prices.