Turbulence marks 2023 as the cannabis market keeps defining itself

As we look forward to a new year of hilarious litigation hijnks, new corporate receiverships and an unrelenting race to the bottom on pricing, I thought it might be nice to recap some of the biggest pieces of news and trends to happen in 2023.

Since voters legalized medical marijuana in 2008, constant and contentious change has been annual. This year, we saw huge market corrections and trends that point to a quickly maturing and saturated legal cannabis market. We have an interesting vantage point in Lansing, which has a unique and rich cannabis tradition. In addition, our proximity to the wheels of power at state government make the hits that much better.

Investors took control of Skymint, including this location at 3315 Coolidge Road in East Lansing.

The rise of the receivership boys

Hubris. It’s the only word I can politely use to describe a lot of folks who had their legal cannabis ventures taken away from them by investors. Who can forget the consummate hater of caregivers, Skymint? The Dimondale-based group of chads was infamous for spearheading a campaign to rein in caregiver rights under the guise of consumer safety. This year, its Canadian investors took control of the company in order to satisfy the millions in debt the Skymint group racked up. This month, operations at the company’s mid-Michigan cultivation facility were officially wrapped up. Its creditor, Tropics LLC, will administer its remaining retail locations. Also in Lansing, Rehbel Industries continued in receivership after a fairly public and at times bizarre breakdown by Michael Doherty, its founding owner and operator who was jailed twice. The company at one time had two active cultivation facilities and two valid but not active retail licenses in the capital city.

 All across the cannabis space, would-be ultra-rich guys will have to settle for  being regular rich guys after their cannabis dreams were  squashed out by the market, lack of experience and inability, and investors who are demanding the returns promised on their Looney Tunes-esque business plans that permeated the early days of legal cannabis. The year saw numerous operators drop out and sell their facilities for pennies on the dollar or have them taken away by investors who have grown tired of cash burns.

Litigation life

There is a saying among cannabis operators in Michigan: “Nothing means anything until a few judges say so.” The year saw the pace, and stakes, of litigation as a business tool continue to rise. Testing giant Viridis Laboratories has spent the last couple of years locked in an almost constant battle with the state Cannabis Regulatory Agency over dubious testing methods and lab transparency. This year was also rocky for retailers in the Upper Peninsula as the war for the pocketbooks of Wisconsin and Minnesota customers bloodied the western UP with red tape and billable hours, while litigation powerhouse Lume and other big-money downstate actors tried to eek into a lucrative market after being outperformed on licensing by locals Firestation and Rise UP in the strategic western UP city of Menominee. With more competition and shrinking margins, lawsuits and bullying municipalities were hot tactics in 2023.

Return of hash

This year was, in my opinion, the beginning of the resurgence of hash and other solventless products in the legal cannabis market. Solventless productions, such as hash, are made without the use of hydrocarbons or other chemical solvents like butane. Instead, water and friction are used in an ever-evolving process of extraction that delivers what many heady connoisseurs consider a superior dabbing option. The first few years of legal cannabis saw a lack of top-shelf solventless offerings, and those that were available were ridiculously expensive. As cultivators’ capacities have increased and consumers’ palates have matured, 2023 saw many new offerings to the solventless segments and drastic improvements from operators already in the space. Local producers like Franklin Fields, powerhouse Element and one of my new favorites, Ice Kream Hash Co. here in Lansing, offered some of my favorite solventless products on the market this year. NLG,  a multiple-time Cannabis Cup-winning extraction company operated by former caregivers, also brought some of its products into the legal market. On the west side of the state, caregiver legend The Wave introduced products into the legal market. His products are sought after in the traditional market, and his entrance into legal dope, like NLG’s, has been widely anticipated. Hopefully, as the market matures, the demand for this level of quality will allow more  legacy and small operators into the segment.

The year was just as turbulent as any year in Michigan cannabis. The proverbial winners and losers of the market are being determined, and new consumer tastes are being delivered. We’re at a true pivot point. Hopefully our tradition of patient and consumer activism around this area will shape an industry that values and elevates the small and virtuous operators. It’s my hope that informed, knowledgeable consumers and patients will help turn the tide in the coming years as market maturity plays out.