Michigan regulators are trying to make sure cannabis monopolies don’t form in the state, which legalized cannabis in 2018. One of the main problems they’re dealing with is that there are too many hurdles for new business owners to get into the industry, so that will need to be addressed so competition can increase.

Rick Thompson, executive director of NORML Michigan, told Cannabis News Box that monopolies controlling the industry in Michigan is a serious threat.

“Multistate operators and Canadian-financed corporate entities represent a significant threat to Michigan’s current cannabis industry,” Thompson said. “While Michigan has not seen large MSO infiltration we have seen product lines with national profiles entering the marketplace.”

Thompson said that Michigan cannabis enthusiasts don’t want to see the cannabis industry become corporatized. He said it’s also important to consider how Michigan can create a more diverse industry.

“Michigan’s cannabis industry is rich with diversity, and is on its way to becoming more diverse. There is a competition for available licenses, and
in that battle the MSO has a significant financial, public relations and support advantage over start-up companies and non-chain stores. Corporations headquartered in Michigan put their profits back into the state’s economy,” Thompson said. “Out-of-state corporations ship profits out of the state; Michigan gets less bang for the buck when purchases are made at an MSO instead of a locally-owned cannabis company.”

All of that said, Thompson isn’t too confident that these regulators will be able to stop monopolies from forming. He noted that Michigan currently has an open license system. Monopolies are a problem that has arisen in multiple states that have legalized cannabis, and they’re not easy to fight.

“The cannabis industry is struggling to compete with the legacy market. If dispassionate management and unresponsive corporations create a purchase experience which is not tailored and personalized, the legacy market will get that customer’s business forever,” Thompson said. “The advent of MSOs in the industry correlates to the industry struggling to recruit customers from the legacy market. Without local owners, local champions and local successes, the cannabis industry offers few enticements to make people drop their traditional market sources and enter the regulated marketplace.”

It may be an uphill battle, but regulators seem to believe they can make the industry more competitive and diverse. If they’re able to succeed, it may help other states learn how to deal with this problem.