Since recreational marijuana was legalized in the state of Michigan in 2018, local dispensaries in the city of Ann Arbor have continued to see success in the cannabis industry.
On Nov. 4, 2008, the state of Michigan passed the Michigan Medical Marijuana Initiative, which enabled the legal consumption of up to 2.5 ounces of cannabis if accompanied with a doctor’s note. This change marked the first time cannabis was legal in any capacity in the history of the state of Michigan.
A decade later in November 2018, Michigan became the 10th state in the nation — and the first in the Midwest — to legalize recreational marijuana. One year later in December 2019, dispensaries were approved to legally sell recreational cannabis products.
The transition from medical to recreational cannabis has not been without complications. Al Moroz, manager of Arbors Wellness, a recreational and medicinal dispensary on East Liberty Street, said he ran into bureaucratic challenges while working to incorporate recreational sales into his business. Moroz said some of the challenges he faced included increased paperwork to obtain licenses and building trust within the community.
“With cannabis, all the obstacles you face are on the front end,” Moroz said. “The obstacles you face are getting through the licensing process, getting the cities, the communities, the counties and the states to sign off on your ability to be a licensed and recognized establishment.”
Moroz said the company also saw problems with demand exceeding supply early on in the transition. He said this issue was addressed when laws instituted by the state requiring the separation of recreational and medical cannabis enabled Arbors Wellness to ensure they could adequately supply their medical patients.
Despite Arbor Wellness’s optimal location on East Liberty Street, Moroz said University of Michigan students don’t contribute nearly as significantly to their business as Ann Arbor residents do. Moroz said he believes the increased tax for recreational cannabis causes the younger generation and college-aged students to continue to purchase off of black markets. Recreational marijuana is subject to a 10% excise tax along with the regular 6% sales tax in the state of Michigan.
“The people who have expendable income currently are adults,” Moroz said. “A lot of the younger generation, the people with less of a stable career and income, are probably more likely to purchase off the black market.”
Mark Osbeck, clinical professor of law at the University who specializes in marijuana law, said he believes the criminalization of marijuana led to wasted resources and increased prison densities, a consequence that disproportionately affects Black communities.
“There’s been a lot of wasted law enforcement resources enforcing marijuana (violations),” Osbeck said. “Governments have been arresting and convicting people of mere possession offenses. Most people think that’s … detrimental to the communities that are affected by (arrests), primarily minority communities.”
Osbeck said there were both political and economic benefits to legalizing marijuana, noting that the profits on illegal cannabis were previously nontaxable, but are now being taxed at a higher rate and generating state revenue. Osbeck also said legalization ensures cannabis is federally regulated and reduces the risk of the marijuana being laced with other more harmful substances.
“Economically, the benefits are diverting money that was going to illegal cartels into legalized businesses that are taxable,” Osbeck said. “That money is coming back to states in the form of revenue (the state) can use for schools or whatever else they want to use it for.”
While Osbeck said he was pro-legalization and decriminalization, he said full legalization was a double-edged sword. Osbeck said there are several health issues that are attributed to increased marijuana use among young people, and around 9% of cannabis users become dependent on it.
LSA sophomore Mutaz Faqqouseh, who has a medical marijuana card to manage ulcerative colitis, said the legalization of recreational marijuana in the state of Michigan has made it easier to access cannabis. Faqqouseh is from Florida, a state where recreational cannabis is not legal, which increases the demand and makes it harder to obtain medical marijuana cards.
“There’s definitely a higher demand for medical cannabis in Florida than in Michigan,” Faqqouseh said. “It is definitely more difficult for me to get it here (in Florida) than it is in Michigan.”
Faqqouseh also said the legalization of recreational cannabis in Michigan has reduced the stigma of using medical marijuana, a shift that has made him feel more accepted for using it in Michigan than in Florida.
“When people hear medical marijuana … they just think ‘Oh he’s smoking weed,’” Faqqouseh said. “Since recreational marijuana’s been legal in Michigan … there’s definitely more acceptance to (cannabis) especially around the older people.”
The city of Ann Arbor has a long history of passing cannabis-friendly legislation. In 1972, Ann Arbor enacted a penalty of $5 for the possession of marijuana, becoming the first city in Michigan to remove criminal penalties for cannabis possession. The anniversary of the passage of this legislation has developed into the annual Hash Bash celebration on the Diag, which originated as a protest against reimposing criminal laws against controlled substances in Michigan. Hash Bash shifted to an online celebration during the COVID-19 pandemic in 2020.
Jack Edelstein, owner of Apothecare Ann Arbor on Plymouth Road, said Ann Arbor’s progressive cannabis policies have made the cannabis market in the city one of the most competitive in the state and has allowed for over two dozen dispensaries to open city-wide. Under the current state law, local municipalities can still prohibit the sale of marijuana and operation of dispensaries within their city.
“The main distinguisher of the market for the (dispensaries) are the local ordinances,” Edelstein said. “There are many towns, municipalities and jurisdictions in Michigan that did not opt in to allow marijuana sales … Ann Arbor is probably one of the more competitive cities in terms of the number of provisioning centers.”
Green Wolverine, a Ross student organization based in cannabis advocacy on campus, was formed in 2017 to further explore the relationship between cannabis and business. University alum Adam Rosenberg, the founder of Green Wolverine, said the cannabis industry is growing dramatically in Michigan, and Green Wolverine’s goal is to inform students about opportunities in the industry.
“We’ve seen the maturation of the medical cannabis market in Michigan as well as the brand-new adult-use cannabis use market,” Rosenberg said. “We’re seeing new companies emerging in the space … bringing with them new methods of investment, new brands (and) new products.”
This article has been updated to clarify the origin of Hash Bash.
Daily Staff Reporter George Weykamp can be reached at gweykamp@umich.edu.
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