As 2024 unfolds, drawing individuals back to their professional commitments, the Michigan cannabis sector stands at a pivotal moment following a landmark year where sales soared to $3 billion. Despite a contraction in the market size of legal cannabis in other states, Michigan remains a unique growth story. Both retailers and producers are engaged in a fierce competition, driving down the average price of an ounce to approximately $80, in a bid to capture greater market share.
The journey towards market maturity for cannabis in Michigan is marked by intense competition, indicating that 2024 will be a year of significant shake-ups, determining the industry's winners and losers. However, several promising developments are on the horizon that may provide relief to the strained cannabis operators.
Federal Rescheduling and the SAFER Banking Act
Every year brings speculations within the cannabis community about federal rescheduling, and 2024 might just be the year it happens. Additionally, there's a growing momentum for the federal government to address the banking challenges faced by cannabis operators.
The Secure and Fair Enforcement Regulation (SAFER) Banking Act aims to protect financial institutions from government liabilities when engaging with licensed cannabis businesses. This legislation would also facilitate banking access for cannabis operators, potentially leading to more traditional funding opportunities for the industry. It would particularly benefit legacy and former-caregiver-run businesses and address issues related to personal mortgages and other banking services affected by employment in the cannabis sector.
These federal changes could significantly benefit Michigan operators, currently taxed at nearly 70%, by allowing them to deduct a substantial portion of their costs. This would be a boon for both large-scale and small craft operators in the state.
The Launch of Brian Hanna’s Lab
2024 might also witness the inauguration of a testing facility by the Michigan Cannabis Regulatory Agency, an initiative prioritized by Executive Director Brian Hanna since his appointment in 2022. This independent facility aims to serve as a reference lab, upholding the integrity of Michigan's cannabis market against THC inflation claims.
The industry is rife with suspicions about labs inflating THC levels, a practice believed to be common across Michigan. The establishment of a state-run reference lab could significantly enhance the reliability of testing and consumer confidence. This issue extends beyond Michigan, with many industry insiders suspecting widespread THC test result inflation among successful labs nationwide. Such practices not only deceive consumers but also fuel a THC-percentage competition among producers, undermining the industry's integrity and traditional quality markers like taste, smell, and bud structure.
The creation of this state-run reference lab, though its impact on the market and unscrupulous labs remains to be fully understood, represents a significant step towards transparency and accountability in Michigan's burgeoning cannabis industry. This move is a testament to the state's commitment to fostering a trustworthy and transparent sector as it continues to grow.