After months of discussions among stakeholders, the Michigan Marijuana Regulatory Agency (the “MRA”) released a regulatory process that will govern the manufacture and sale of THC-infused beverages in Michigan. The good news for consumers? They’ll see THC-infused beverages for sale at licensed retailers in Michigan by early summer 2021.
Allowing THC beverages means big business for Michigan. BDSA forecasts 2020 medical and recreational cannabis sales in Michigan to be approximately $950 million, making Michigan the seventh highest ranking state for cannabis sales in the United States as of 2020. And BDSA forecasts a growth of 10% in 2021, meaning that Michigan will hit over $1 billion on cannabis sales for the first time.
While THC beverages are gaining steam in established US recreational markets, their market share remains small, at less than 1% of total dollar sales in the United States (or 5% of total edibles sales, which are 15% of all cannabis sales). Even though THC beverages will make up just a sliver of this $1B+ market, the opportunity for beverage makers in Michigan is significant. Michigan can expect nearly $8 million in THC beverage sales during their first year on the market, assuming that Michigan performs similarly to other states where THC beverages are sold.
The green light for THC beverages is great news for processors like The Waypoint Processing, a licensed processor in Bangor, MI that is prepared to process beverages for brands such as Dr. Terps, Sugar House and Little Saints. Not only does the Waypoint team have years of experience infusing CBD into canned beverages, but it also recently won first place at the Michigan Harvest Cup for its Dr. Terps orange soda. Steve Denenberg, owner of licensed processor Ground Control Michigan, described early beverages interest from retailers as “off the charts” compared to more established form factors.
Interested parties are watching Michigan to see whether THC beverage sales exceed market share numbers of other states. Michigan, after all, is in the heart of the Midwest and has perhaps more of a drinking culture than other more established market states such as California and Colorado. In addition, unlike its sister state, Illinois, Michigan already has granted applications for both marijuana “consumption establishments” and “temporary events,” both of which pave the way for someday consuming THC beverages in a social manner similar to the way we consume alcohol at bars and restaurants.
Developing the comprehensive framework for THC beverage processing approvals was a joint effort by the MRA, the Michigan Cannabis Industry Association (MCIA) and a number of established licensees, including Red Arrow Farm and Skymint. Robin Schneider, executive director of the MCIA, expressed that she was “thrilled that our regulatory agency has given the green light to begin production of cannabis-infused beverages.” Noting that MCIA members are already in process of achieving compliance, Schneider said she was “very excited to witness the unveiling of their new innovative beverage product lines.”