Midwest Marijuana: Of the 2 local states where recreational marijuana is legal, Michigan tops Illinois in many areas

“Pure Michigan” may conjure up visions of beaches and cherry pie for some, but for cannabis users, it means clouds of smoke and weed bargains.

The state brand is clear on the online social networking site Reddit, which features a page dedicated to Illinois pot users, who often make wistful references to Michigan’s cannabis scene.

“Why can’t Illinois be like Michigan?” one commenter wrote.

“I will never shop in IL again,” wrote another.

“I appreciate the hospitality in Michigan. Nothing even close to this good in IL.”

The two states are the only ones in the Midwest to legalize recreational or “adult use” marijuana at about the same time: Illinois in January 2020 and Michigan the month before. While Illinois has a social equity plan that Michigan lacks, the state of Wolverine has outperformed the state of Prairie in many ways.

Even though Illinois has a larger population of nearly 13 million, compared to Michigan’s 10 million, Michigan had slightly higher sales of medical and recreational cannabis combined in 2021, with both states nearing $1.8 billion.

Michigan had more than 1,500 adult businesses as of July, while Illinois had just 21 operating growers and 110 retail stores, though more are on the way.

Illinois required applicants to go through a complicated and lengthy application process, which resulted in numerous lawsuits, though the process has been streamlined for the future. In the Michigan Free Market, if applicants meet the criteria and have a local permit, they obtain a license, with no limit on the number of businesses.

Perhaps the most obvious difference between the states is in price. Much greater competition in Michigan has seen wholesale cannabis flower prices collapse nearly 75% since January 2020, with a pound selling for less than $1,000 and ounces for less than $100.

In Illinois, by contrast, $100 could buy a quarter ounce. In fact, a recent analysis by industry watchdog Grown In found that Illinois has the highest prices among the nation’s 19 adult-drinking states.

High prices keep the most cannabis sales in Illinois on the illicit market, according to the Anderson Economic Group. The prices also drive some customers to travel by road to stock up in Michigan, where they say the product is often better, though it remains illegal to take it out of the state.

“The differences are incredible,” said Cole Preston, host of the cannabis podcast “Chillinois.” “People are frustrated. Most cannabis users in Illinois say, ‘Go to Michigan for your weed.

In response, Illinois officials noted that the state has issued 88 craft grow licenses, 185 dispensary licenses, and many more infusor and transporter licenses that have yet to open.

That means next year will be one of “incredible growth and momentum,” Christopher Slaby, a spokesman for the Illinois Department of Financial and Professional Regulation, told the Tribune.

He emphasized that under the state’s controlled release of business licenses, newer licenses are owned 100% by social equity applicants, with at least 45% majority ownership by people of color.

The state generally defines social equity applicants as people with low-level marijuana charges in the past, or those from areas most damaged by the drug war, marked by poverty or high marijuana arrest rates, who generally designates majority black and Latino neighborhoods.

However, due to long licensing delays, rising costs, and difficulty obtaining funding, none of the new social equity licensees have opened their doors yet. Only one African American and four Hispanics had an ownership interest in Illinois dispensaries since last year.

In Michigan, regulators do not consider diversity when issuing licenses. The state recently started a voluntary program program to promote diversity in business plans.

Illinois regulators note that COVID disrupted the state’s licensing plan and say the state’s license cap offers some protection against drastic price fluctuations and market saturation seen in other states.

While cannabis remains illegal under federal law, the differences between the two states stem from how they started. Michigan used voter referendums to legalize medical marijuana in 2008 and recreational marijuana in 2018.

It largely followed the path blazed by other states where voters legalized the plant, including California, Colorado and Oregon. Those states have issued thousands of licenses, resulting in a booming industry that creates many jobs and hundreds of millions of dollars in tax revenue. But oversupply leads to low prices, consolidation, and some closed deals. California in particular is struggling with more products illegally grown and sold.

In contrast, Illinois was the first state to open up a legal recreational market through legislation. That meant lawmakers could write the law to promote greater diversity. But the law allowed some existing medical cannabis companies to dominate the market. They gained a nearly three-year head start selling adult marijuana, while social equity seekers lagged behind.

Both states allow people to expunge low-level marijuana convictions from their records. But Michigan is more liberal in several other ways. While Illinois allows residents to possess 30 grams of marijuana, roughly 1 ounce, Michigan allows possession of 2.5 ounces.

Michigan also allows home delivery of cannabis to medical patients. Have an oversight regulatory agency, instead of several. And it has a special events license to allow public consumption at concerts and other events.

Michigan also has lower taxes, with only a 16% tax, compared to Illinois taxes that can be as high as 45% in Chicago. While cannabis taxes in Michigan go primarily to roads, schools and local governments, in Illinois they go to rebuilding communities, law enforcement and municipalities, and fighting substance abuse .

Michigan hasn’t been without its problems, issuing a marijuana recall worth an estimated $240 million last year after tests found mold contamination.

With an unlimited number of businesses, just as most other industries allow, Michigan now faces a huge cannabis glut, with potential supply exceeding sales by more than five times, Michigan cannabis attorney said Bob Hendricks.

“The people who get involved in this are super risk tolerant,” he said. “If you like the adrenaline rush of, ‘What will it be like today?’ you are in the right industry.”

Jeff Remijas, owner of Beachgrass Events, recently hosted a marijuana-friendly concert and gathering at a race track in Hartford, Michigan, which had not one but two consumption areas, one primarily for smoking, the other for dabbing or snorting. concentrated cannabis, with a joint-rolling contest and prize giving.

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Remijas sees the event as similar to beer and wine festivals that occur throughout Michigan, with cannabis growers bringing a personal, artisanal touch, akin to microbreweries.

But Michigan got off to a rocky start, with some local prosecutors charging and convicting growers of breaking the law. The city of Detroit recently began its business licensing process, after being held up in court for two years.

And from the perspective of licensed business operators in Michigan, attorney Denise Pollicella said, “Michigan is an example of how not to create a cannabis industry.”

The state allows more than 20,000 caretakers to grow up to 72 plants at a time, without lab testing their product or tracking its sale, as licensed dispensaries must do. Talking in a Benzinga cannabis investor conference in Chicago last week, Pollicella said Michigan created “an almost state-backed illicit market.”

Caregivers made a lot of money without normal business constraints, but so many people joined the industry that the value of businesses has plummeted and people are leaving, Pollicella said. Corporate growers have pushed for limits on caretakers.

Melissa Wagamon, president of the Great Lakes region for Cresco Labs, which oversees operations in both states, described Illinois as a “sustainable” market, saying prices in Illinois are down 10% in the last year.

She said she is excited about opening new dispensaries in the future, saying, “That will make a big difference. That will be a catalyst for growth.”