The last year has been a challenging one for the Michigan Marijuana Regulatory Agency (MRA), which included the decision to issue a massive cannabis recall on products tested by Viridis Laboratories and an on-going filed soon thereafter by Viridis.
Grown In spoke with MRA Executive Director Andrew Brisbo Thursday to discuss other challenges the agency faced in 2021, progress with social equity strategies, and whether new regulatory guidelines are forthcoming. In terms of sales, Brisbo disputes that total cannabis sales in Michigan stalled over the last six months. However, Grown In has data that says otherwise. Brisbo would not answer any questions related to Viridis Labs or the agency’s November recall order.
This interview has been edited for clarity and grammar.
Grown In: Regarding the MRA’s three-year plan, you stated you have published a strategic plan the last several years and that it “is an important tool for big picture planning and for ensuring the mission and goals of the agency are aligned from the executive level through each division and section.” Have you attained any of the goals set out from the previous plans?
Andrew Brisbo: This was the first year we added some of the executive initiatives. I think they are consistent with what we talked about demonstrating publicly. I would say overwhelmingly, we do achieve those goals. Our agency, our leadership team, and our staff are very good at documenting what expectations are and what metrics they should be hitting and laying out a plan on how we get to the point of achieving those goals.
Grown In: Is there anything in particular you were able to achieve?
Brisbo: I think we did some things that were broad restructuring to address the evolutions of the industry. One example is that we require annual financial statements to be submitted from all businesses and that was housed in our licensing division. We recognize the need to build in some specific staff who are specifically focusing on that process because there was recognition that it was a very technical area. Licensees have lots of questions. We’ve worked with the CPA community to devise a plan as to how those would be submitted and now, we have an area that specifically focuses on that.
Additionally, one key tenet of our strategic plan has been, and probably always will be, stakeholder engagement. The agency has always devoted a lot of energy to engaging stakeholders in a variety of ways and we continue to expand on those opportunities by developing new ad hoc and standing working groups, continuing with direct industry stakeholder groups as warranted and really being proactive particularly in our social equity program and developing resources and doing outreach events to make sure we are conveying information and answering questions that any stakeholder might have.
Grown In: Data shows that total cannabis sales in Michigan have stalled over the last six months. Why do you think that is or do you agree that sales slowed?
Brisbo: I think you may be looking at different data than I am. In the first six months of 2020, there were $810 million in sales in the state. In the last six months, there were $982 million. So, I don’t think that’s stalling. In the last month of December was the highest month of adult-use sales we’ve had in the history of the program, surpassing July by $7 million and improving over November by about $15 million? I think we’ve seen pretty steady growth. We do see the medical market starting to decline but that’s to be expected with legalization on the adult-use side and a lot of investment and consumers moving toward the adult-use market.
I think we’re reaching a period of stabilization in the market. One thing worth noting, is that even though the second six months outpaced the first six months, over the course of 2021, we also saw retail prices in the medical market decline 33.6% and retail prices in the adult-use market decline 47%.
So, overall, if you look at that number, there’s the value of the sales in any given month that’s not increasing as quickly as it was initially. It’s also combined with the fact that retail prices are declining. If we look at the volume of product being sold, flower for example, January versus December 2021, there’s 35% more flower sold in the market in December and 290% percent more in the adult-use market.”
Grown In: Last year saw a legislative fight over caregivers and regulation. We’ve also seen lots of reports of underground grows discovered around the state. What does MRA have planned to help reduce those grows?
Brisbo: The illicit market is pervasive in every state that has legalized access and that can be a challenge. Obviously, we want to ensure, first and foremost, that there’s a robust and regulated commercial market so that consumers have the option of accessing products through the regulated market so that we can ensure they have been produced in a way that meets certain standards and that products are tested before consumers purchase them.
We also field complaints and continue to coordinate law enforcement response when appropriate, working with our partners at the Michigan State Police. The laws in Michigan are fairly light when it comes to penalties related to operating illegally, so that creates some challenges in terms of getting prosecutors to take action, but we are going to continue to investigate any issues that come to our attention and try and create a stable and productive, regulated industry so the consumers will have the choice to access cannabis products through regulated facilities.
Grown In: In general, are you considering any policy changes?
Brisbo: We’re always looking to fine tune the program to ensure that we are doing our job to create a regulatory environment to allow businesses to be successful and protect consumers. We actually have a round of rule making that’s near completion. There are 10 rules that they are evaluating, and we expect to have them implemented around mid-February, early March that will continue to build on things we’ve learned along the way, making sure we have clarity in regulation and continue to provide additional opportunities for businesses.
Grown In: An investigative report was published by the Chicago Sun-Times, it seems that pre-roll often has mold upon sale. Is there anything MRA has planned to address these cases?
Brisbo: At this point, Dir. Brisbo’s press secretary, David Harns, intervened, “When we discussed this interview, we discussed general topics and had Andrew set aside 10 minutes for that. I kind of feel like we’re getting into a little more specific stuff.”
Grown In: What’s the status of the social equity advisory committee recommendations? We reported earlier this year that you have cut bait on a few projects. Other than fee reductions, what recommendations are you moving forward with this year?
Brisbo: We’ve implemented several of the recommendations we got from the Racial Equity Advisory Work Group and we also established a standing, Diversity, Equity and Inclusion Work Group so that we can not only continue to evaluate those new ideas to bolster and improve the agency’s social equity program and overall fulfill our goal of having a diverse and equitable inclusive industry here in Michigan but also, that we have a group through which we can discuss all the processes and policy the agency has started administering so that we can get their perspective on how anything might have either a positive, negative or neutral impact on those concepts of diversity, equity and inclusion.
One of the things that we recently implemented was something we call the Joint Venture Partnership program. It’s a program that’s designed to recruit social equity participants and to recruit other existing businesses whether they are directly plant touching or tangential businesses so that we can connect people who have similar needs and experiences. So, individuals who are looking for, say, mentorship, can connect with licensees who are willing to provide mentorship and individuals looking for capital infusion can connect with those who would be willing to partner.
We’re excited about that and got a lot of good responses on those concepts. Soon, we’ll launch a live version of that website and make it a little more user friendly and allow for some more targeted searches by the user to make better connections.”
Grown In: As you’ve watched 2021 come and go, what were your three biggest challenges in 2021?
Brisbo: I think the biggest challenges have been the same over the last couple of years. Looking at how we can have a bigger impact in the social equity space is always a challenge, especially when there are politics involved. We know some of the key barriers to entry like access to capital and real estate and we don’t really have funding or mechanisms to assist with that directly. So, we have to work through indirect routes to make progress there. Overall, I think the market in Michigan is thriving and great things are happening here.
Businesses are continuing to grow and be founded and achieving success in the state. Learning and growing together is how I describe the market in Michigan. Participants in the industry are learning more and becoming more effective and the agency is learning more about how the industry operates and where we can best influence regulatory policy to make sure that it creates an environment where consumers can be protected without it being unnecessarily burdensome for those businesses who chose to operate in this space.
I think the coming year is going to bring an evaluation of new concepts continuing to make Michigan a leader in the space of academia and research, looking at issues of sustainability as the industry continues to grow and become more stable.
We need to consider the impacts of a lot of different environmental factors including energy and air quality, water quality, consumer waste as well as plant waste. So, I think there’s just a lot of opportunities to continue to be successful and to establish partnerships between governmental organizations and industry operators to see some keen success in Michigan.
