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420 with CNW – First 8 Days of Recreational Weed Sales Generate More Than $1.6 Million in Michigan

It looks like the newly legalized weed industry in Michigan is set to hit major milestones pretty quickly. The first eight days of legal adult-use marijuana sales at the five retail outlets that were open in Michigan amounted to $1.6 million. Three of the five shops either run out of stock or had an inadequate supply of marijuana products.

From the first to the eighth-day of sales, the total was $1,629,007. The 10% excise tax imposed on then recreational products amounted to $162,900, and the 6% state sales fee raised $107,514.

Once the recreational marijuana industry is stabilized by 2020, the state House Fiscal Agency estimates that the annual sales for adult-use cannabis will be $949 million, out of which the 10% excise tax charges on the sold products would be $94.9 million and 6% sales tax of $57 million.

The ballot proposal which was approved by the voters in 2018 stated that the first $20 million dollars from excise tax raised from the sale of recreational marijuana within the first two years after the launch of retail sales would be used to advance studies on the benefits of cannabis and how it is used to treat different medical conditions, such as PTSD.

The remaining excise fees would be divided between municipalities and counties allowing marijuana businesses within their jurisdictions to fund school and road infrastructure programs. The House Fiscal Agency projected that by 2020, the excise fee total would be $97.5 million and that by 2023, it would rise to $163 million. This amount is just a tiny fraction of the state budget of $60 billion.

For comparison purposes, Colorado recorded about $1 million in sales on the first day of recreational marijuana retail sales. However, these sales were made at 24 open retail outlets. Michigan had more than 2,200 customers on the first day in the five stores.

There were three stores open on the recreational marijuana sales launch day, which include, Greenstone Provisions, Arbor Wellness, and exclusive Brands. While Michigan Supply and Provision in Morenci opened on the evening of the first day.

Greenstone ran out of marijuana stocks for several days consecutively, while Michigan Supply had low supply. In the first two days of  retail sales, Lit Provisioning, the fifth store, run out of stock after servicing 750 customers, after each spent an average of $103.

The president and Chief Operating Officer of Lume Cannabis Company, Doug Hellyar, who is also the owner of Lit Provisioning, said that they were humbled that customers chose to buy products from their shop during the first week of recreational marijuana sales. He also noted that people traveled across the state, despite the chilly weather and stood in line for several hours to purchase cannabis.

The sales launch comes a year after voters legalized adult-use weed through a ballot. Michigan is the 10th state to allow the sale of adult-use marijuana.

The state of Michigan has issued 21 licenses to recreational marijuana businesses since it started accepting applications on November 1. It has also pre-qualified 73 applications. Out of the  1,771communities, 1,400 have vetoed the sale of legal weed in their towns, which has posed a challenge for weed businesses.

It is however hoped that those communities opposed to weed will come around as time goes by. Experts think this optimistic outlook may be exactly what industry players like LiveWire Ergogenics Inc. (OTC: LVVV) and VIVO Cannabis Inc. (TSX.V: VIVO) (OTCQX: VVCIF) are counting on for the success of their counterparts operating in Michigan.

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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