ANN ARBOR, Mich. – James Daly is eager to make marijuana history today, when he plans to open the doors to Arbors Wellness, beckon the lengthy line outside and legally start selling recreational pot for the first time in the Midwest.
“We've worked very hard to be prepared,” said Daly, who owns the medical dispensary that, for now, is among just six shops in Michigan – mostly in Ann Arbor – also approved to start selling for adult use this month. The business is doubling staff and has fielded calls from potential customers across the state along with neighboring Ohio and Indiana.
“The end of prohibition is historic,” he said. “We wanted to rip the Band-Aid off.”
Michigan and Illinois, which allows sales starting Jan. 1, are officially joining nine other states that broadly allow marijuana sales. Companies are rushing to complete renovations at dispensaries, expand their growing facilities, and get staff hired and trained.
The Midwestern states' launch into the potentially lucrative recreational market comes at a turbulent time for the industry, which has been rocked by layoffs, the vaping health scare and investor disappointment with Canada's marijuana program.
In both states, a limited number of businesses have received state licenses letting them sell recreational products initially. But those same retailers must keep enough product on hand to supply people certified as patients under medical marijuana laws.
The conditions are “almost a guarantee” that Illinois and Michigan customers will experience long lines, product shortages and potentially high prices in the early stages, said Adam Orens, co-founder of the Marijuana Policy Group.
“They've got to get through the growing pains to get a system implemented,” he said.
More than 1,400 of Michigan's nearly 1,800 cities, townships and villages are not allowing recreational businesses. Even Detroit, home to the most medical dispensaries in the state, has delayed recreational sales until at least Jan. 31.
“This is brand new for a lot of municipalities. I think it's important that they are doing their due diligence and taking an approach that honors the will of their people,” said Andrew Brisbo, executive director of the Marijuana Regulatory Agency, which has awarded 18 licenses and approved 78 pre-qualification applications.
In Illinois, seven months will have separated Gov. J.B. Pritzker's signing of legislation permitting people 21 and older to buy and possess marijuana and the start of sales in January.
Most of the state's licensed cultivation companies are expanding their space to meet higher demand for marijuana products. But that work takes time, too.
Mark de Souza, CEO of the state's largest marijuana producer Revolution Global, said he has heard from dispensary operators “panicked” that they could have empty shelves within months of adult sales beginning.
Still, retailers are considering appointment-based systems rather than lining up customers in winter weather. Others have retrofitted their dispensaries to let medical patients in one door and recreational customers in another, hoping to limit confusion if their product supplies run low.
State law lets local governments bar recreational dispensaries, and at least two of Illinois' existing medical dispensaries are in communities that decided to prevent expanded sales.
Illinois lawmakers said they expected a slow start. Their long-term goals, though, hinge on parts of the law intended to ensure that people of color can open and work for marijuana businesses despite historic inequities in enforcement of state and federal drug laws.
Michigan has cut marijuana licensing fees for prospective business owners living in 41 cities whose residents were disproportionately impacted by drug enforcement.