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Abstract

Since legalizing cannabis for adult use in 2018, Michigan’s (recreational) cannabis market has become the second largest in the nation. As the state’s market sees rapid maturity, it serves as a model for other states with ongoing legalization efforts. Michigan’s actions, and others like it, have begun to impact movement at the federal level, with multiple cannabis-related bills being introduced in Congress to President Biden signing the first standalone marijuana reform bill earlier this month. As Michigan’s cannabis market continues to mature and grow, it deserves attention from economists and academics alike. Using traditional economic development metrics, this paper evaluates Michigan’s market and place in the context of the national cannabis economy.

Beginning with keystone policies at the federal and state level, the paper then examines Michigan’s strengths and weaknesses through a literature review and market data from Michigan and Colorado. Case studies highlight the cannabis economy’s impact on municipalities from an economic and community development perspective, particularly in rural counties. Research shows vertical integration, public-private partnerships, diversity of products, and, increasingly, user experience are all tools for Michigan’s early success. However, adoption has been slow in rural counties, and the availability of testing facilities and employees has created burdens for one of the state’s fastest-growing sectors, and vertical integration has become a catch-22. The paper concludes by identifying opportunities for future research in cannabis and psychedelic drug policy.

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