by Rick Thompson/December 16, 2020
2020 had a Big Story, says Marijuana Regulatory Agency Director Andrew Brisbo, and it wasn’t falling patient numbers or the vape crisis. The big story from the year that was: the huge increase in the number of licensed cannabis businesses and rocketing cannabis sales despite numerous restrictions on business due to the pandemic.
The Director joined the Four20Post podcast on December 9 for an exclusive interview with Mike Brennan, Rick Thompson, Jamie Cooper and guest Stevan Bratic.
“The big story this year, in terms of what we’ve managed as an agency,” the Director revealed, “has been the issuance of licenses and the growth of the industry itself.”
The cannabis industry in Michigan has grown to over 750 medical licenses and 473 adult-use licenses. “We have not seen the number of medical applications in the commercial space diminish like we thought it might,” considering the expiration of the medical license requirement, Brisbo explained. “We might start to see a shift in how businesses are structuring.”
Patient numbers are falling in Michigan, said the Director, but not as fast as expected. “We’ve seen… a decline in the number of registered patients in the state. I think when legalization occurred in 2018 we foresaw that coming,” Brisbo said.
After a peak of nearly 300,000 patients three years ago, the slow and steady decline seems to have plateaued at 241,000 registered patients. “We actually went up last month from 241,000 back up to 242,000,” Brisbo observed. That count is “a little bit higher than I think a lot of us predicted that (the patient numbers) would kind of settle in.”
Patient numbers could continue to decline as more communities opt in to adult use cannabis retailers, and after the medical license requirement for new adult use businesses expires in 2021.
The Director directly discussed a series of proposed administrative rule changes contemplated by the legislature which would integrate the MMFLA and MRTMA business licensing Acts. Brisbo referred to the rule changes as “policy shifts” instead of administrative fixes.
“We’ve been working on some potential policy shifts, as we look at where the market is heading… and figure out the best way to position the state to best serve the needs of the consumers, both adult-use consumers and patients, and create the best environment for businesses to be successful.”
The changes would come via the legislature; a bill was to be introduced this year but Brisbo said it’ll have to wait. “That’s something that we thought might happen this year, but we’ll take up next legislative session.”
Sales and supply issues are the other part of that Big Story. November of 2019 was the last month before adult-use cannabis sales began. “We did about $26 million in sales that month,” Brisbo said. Four months later the pandemic began affecting businesses and purchasing trends, March of 2020, and the cannabis industry was at $52 million in sales in Michigan.
The Covid crisis hit the cannabis industry more softly than it struck other sectors of the economy. “As it turns out, cannabis seemed to be in vogue for those that were stuck at home,” Brisbo observed. “We saw another doubling of sales between March and July. We were up to $109 million in sales in July.”
“Now we’ve kind of leveled off,” the Director added. “We are seeing sales in the adult use market now surpassing the medical market… That happened relatively quickly.”
That kind of retail demand is difficult to satisfy. Michigan’s cannabis industry supply chain is composed of Michigan-grown plants provided by licensed Michigan cultivators- and, until recently, from registered Michigan caregivers growing under the state’s Medical Marihuana Act.
“We’ve phased out what we call external transfers,” the Director explained. “We had been allowing for some product produced outside the regulated market by caregivers to come in through the medical commercial market. That was phased out on October 1st of this year.”
What made it possible to close the door on caregiver cannabis in the system was the maturity of the system itself. “In October 2019 there were 85,000 plants being grown in the regulated space. In March we were up to 197,000 and by August it was all the way up to 397,000,” the Director offered.
Where are we right now? “Depending on the snapshot in time, we have over 450,000 plants that are being grown by regulated growers in the state.”
Achieving progress during a pandemic can be exhausting. “It’s been a very interesting year, in this space, managing the Marijuana Regulatory Agency,” Brisbo summed, and later added, “It’s certainly an exciting time to be working in cannabis, even though I’m just a government guy. It’s a lot more fun than doing other licensing and regulation. I’m happy to be a part of it.”