Last week Lume Cannabis announced the opening of a new dispensary in Escanaba, Michigan, the Lake Michigan iron ore port town. It’s part of a boom of half a dozen dispensaries recently opening up on the libertarian Upper Peninsula, but the interesting part is that Lume’s new dispensary is located on tribal land.
“Escanaba had opted out until October 2022, so it created an opportunity for us,” said Joel Schultz, Economic Director for the Sault Ste. Marie Tribe of Chippewa Indians.
Last September the Sault Tribe and Lume announced plans to open a dispensary on tribal lands in Sault Ste. Marie. It was the first of a series of tribe-related dispensaries to open for Yupers and Northern Michigan, including a pair of Lume-operated dispensaries in Petoskey and Mackinaw City on land owned by the Little Traverse Bay Bands of Odawa Indians, and a totally tribal-owned and operated dispensary, manufacturer and grow operation by the Bay Mills Indian Community, also near Sault Ste. Marie.
Siting dispensaries on tribal lands forgoes the often slow and difficult municipal approval process for cannabis companies, since tribes are considered sovereign nations under American law. The Bay Mills Tribe has opted to go totally independent, mirroring Michigan cannabis regulations, but not working directly with the state. The Sault Tribe is taking a different route, by letting Lume run the entire operation. Lume has also chosen to seek state licensing for facilities located on state lands.
“I think it was a really good financial decision. I think it’s the best way for the Tribe to enter the industry and make money – right now,” Schultz told Grown In last week. “We’ve had conversations about additional licensing for the Tribe to directly pursue things, but I haven’t seen a clear path with a level of quality and safety that we would demand if we did it ourselves.”
Today, Lume either has operating, or is in the process of building 29 dispensaries across Michigan. For a company in the throes of scaling up, loosening Michigan’s tightest biggest bottleneck, municipal approval, is a big win. In return, tribes working with Lume not only get lease revenue from the dispensaries, Lume also gives first preference hiring to tribal members for stores on Tribal lands.
“I don’t think anybody can come to Sault Ste. Marie and say we’ll put Lume out of business,” said Schultz. “I think we’re in a really good spot. Our lease agreement is that we’re more successful, they’re more successful.”
But while cannabis is in a boom period now, Schultz is also looking at a future where the market is not so stable, which is why he is happy to partner with what he sees as the biggest cannabis company in Michigan.
“In a little bit longer, we’re going to be past the phase of first to market, where everyone first to market is going to benefit. Sooner or later this will level out and become a very competitive market. I think some day, buying cannabis is going to be like buying a fifth of booze. I think it’s going to be commonplace, it will be readily available and dilute the market,” he said.
And when that day comes, he says, smaller operators are going to be left in the cold.