Pharmhouse Wellness dispensary in Grand Rapids, Mich. Credit: Mike Fourcher / Grown In

Casey Kornoelje, owner of dispensary Pharmhouse Wellness in Grand Rapids is feeling the impact of Michigan’s saturated cannabis market.

“It’s becoming a little bit more competitive and a little bit more saturated in certain markets such as Lansing and Ann Arbor, Muskegon, Battle Creek, Kalamazoo, basically the major market that exists in the state. Big Rapids is extremely saturated with dispensaries. I can’t speak to the cultivation sites that are in the market. I just know that just from the price of flower it’s becoming more saturated on the cultivation side as well.”

A report from Grown in last August showed over 700 active dispensary licenses in the state. Dozens more have come online since then.

Meanwhile, Michigan has seen a wave of big company mergers, including New Standard’s purchase of three Agri-Med cannabis dispensaries in West Michigan; TerrAscend’s pending acquisition of Gage Growth Corp., Skymint’s purchase of 3Fifteen Cannabis last September, and PharmaCann’s purchase of LivWell in October.

The consolidation wave doesn’t completely eliminate opportunities for minority, or micro and small operators even if it takes them longer to raise capital and become established, says Denavvia Mojet, executive director of the Black and Brown Cannabis Guild.

“Especially in communities of color,” Mojet told Grown In Wednesday. “We already know that entrepreneurship takes a great deal of resilience and I think we’re coming into a market where consumers have been waiting–in a lot of places–for opportunities to support some of the people of color brands and companies,”

Chris Jackson, former partner, and general manager of “Sticky Ypsi” dispensary in Ypsilanti, Mich., agrees there has been saturation in parts of Michigan, but he maintains an optimistic outlook on where things are headed.

“Yes, there is saturation, but I also get the impression that it’s going to be a buyer’s market relatively soon, considering all of the consolidation that’s happening,” Jackson told Grown In.

There is staying power in a saturated market, Jackson added.

“For instance, the Sticky Battle Creek store is in a saturated market but it has performed,” he explained. “Saturation certainly plays a part in day-to-day revenue, but I’d argue that the ability to operate and the level of service an individual receives, the amount of branding you have, impacts your business more and your bottom line more, than saturation at this point.”

Because so many municipalities have opted out of allowing cannabis businesses, there’s a limited number of available locations. And for those opted-in municipalities, they are getting flooded with new adult-use entrants, says dispensary owner Kornoelje.

“Previously you had to have a medical license before acquiring an adult-use license,” Kornoelje told Grown In. “That was for the first two years of Prop One and then after that they lifted the cap and allowed basically any individual whether you were from the state of Michigan or not to just come in and apply for an adult use license with certain caveats. That caused a lot of new entrants into the marketplace.”

Voter referendum Proposal 1, which the legislature later crafted into the Michigan Regulation And Taxation of Marihuana Act of 2018, made Michigan the first Midwest state in the Midwest to legalize adult-use.

But saturation really comes down to competition, and your ability to build a high quality consumer experience, says Jackson.

“For instance, the Sticky Battle Creek store is in a saturated market but it has performed,” he explained. “Saturation certainly plays a part in day-to-day revenue, but I’d argue that the ability to operate and the level of service an individual receives, the amount of branding you have, impacts your business more and your bottom line more, than saturation at this point.”

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Deborah Bayliss

Award-winning journalist with a career that started on Chicago’s South Side providing general news coverage. In addition to Illinois, coverage regions include Georgia and Louisiana where I provided city...