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The Business of Cannabis: Future Economic Impact

As cannabis becomes legal in Michigan and across the nation, companies are trying to navigate new legal ramifications while understanding the business possibilities.

In a session at the Detroit Policy Conference, panelists discussed the future of the cannabis industry and how to work around the current legal landscape. Moderated by Crain’s Detroit Business Senior Reporter Chad Livengood, the panel included Michelle Donovan, shareholder and co-chair of the Cannabis Law Specialty Team from Butzel Long, Scott Greenlee, president of Healthy and Productive Michigan, Rush Hasan from operations and business development at The Reef Detroit, and Megan Moslimani, chief legal counsel for special projects for the City of Detroit.

Key takeaways:

  • There are 284 cannabis dispensaries currently operating in Detroit and 47 of them are licensed. Many others are currently undergoing the licensing process.
  • The recreational marijuana law is very ambiguous and the city of Detroit is currently writing their own provisions which are more straightforward.
  • Cannabis is expected to generate $1.6 billion in revenue by 2030, with more coming in the form of ancillary businesses that provide products necessary for cannabis dispensaries to succeed (lights, flooring, etc.).
  • Colorado was one of first states to legalize marijuana, but 75 percent of the state’s municipalities have opted out, making marijuana illegal. Michigan municipalities are now assessing whether to opt out.
  • California is another state that has legalized recreational marijuana; however, taxable revenue from cannabis decreased the first year after the law was passed in part due to the extremely high state tax rate.
  • The City of Detroit is developing a community benefits requirement for businesses looking to operate in the cannabis industry. This will require companies to employ Detroiters, and help to educate those who want to work in the business.