GRAND RAPIDS, Mich. (WOOD) — While the economy is taking a big hit, one area that is doing just fine is the marijuana industry.
The state’s tally shows a significant increase in sales since the stay-at-home order began.
In March, there were sales of more than $30 million — a $5 million bump in sales statewide over January and February.
That’s nearly 3,000 pounds of weed at a rate of about $300 an ounce.
The state says about $55 million in recreational marijuana sales were reported in the nine weeks between March 9 and May 10.
“People can’t go to movies, people can’t go to ballparks,” said Benham Wrigley, who is the managing partner in Grand Rapids-based CannaLex and has multiple clients engaged in the big business of marijuana in Michigan. “Boredom may have put them in there for a while.”
Kyle Miller, director of strategic relations for Meds Café, says that in the first days on the shutdown, sales were off. But that changed, especially when people started seeing some federal money arrive in their bank accounts.
“Folks have received stimulus money and people who don’t need that money for their own bills have decided to spend it leisurely,” Miller said.
Med’s Café said the switch to curbside service has resulted in unexpected efficiencies that allowed them to hire more workers and provide faster service than with the walk-ins.
On Wednesday afternoon, the lot adjoining the Taco Bell on West Main Street was full.
“We had to re-evaluate, certainly, we had to reformulate the way we were doing things, curbside was a curveball that no one really anticipated,” he said.
Now Meds Café includes delivery with two unmarked vans taking weed Ionia to eastern Kent County, Kentwood, East Grand Rapids and other areas east of Eastern Avenue.
The other recreational marijuana delivery comes from Flint once a week.
Wrigley said delivery has made the business even more lucrative and attractive to more people.
“Having it delivered now gives you anonymity, so nobody’s seeing you walking in. It could be delivered to your house,” he said.
Some stores are reporting sales as high as $40,000 to $50,000 in one day.
“It doesn’t shock me to hear those numbers,” Wrigley said
While many businesses are laying people off, Meds Café has been hiring more people to do curbside service and delivery for the last three weeks.
“In the first week, we were doing maybe five deliveries a day. Now we’re doing maybe 12 or 15 and, hoping that adding a second vehicle will get us up to 40 or 50,” Miller said.
Unlike pizza restaurants, marijuana dispensaries cannot use contract workers with their own vehicles. The delivery people must be employees and the vehicles must be owned by the company.
“If you’re selling 45 to 50,000 or close to it, you’re going to have more employees, and you’ve got more employees now because you’ve got to do deliveries,” Wrigley said
And those sales are subject to a hefty tax, in this example, it is $27 in tax added to a $170 purchase.
Since recreational marijuana sales began in Michigan, the state has received more than $9 million in excise taxes and about $6 million in sales taxes.
Those taxes go to roads, education and the local government.
“I won’t give a specific amount, but we’ve already paid Lowell a pretty significant amount,” Miller said.
The company is not complaining about the taxes and also say they are donating a boat to the local fire department.
“They limited amount of the excise tax to 10 percent, they were then, and I think they still are, the lowest in the United States,” Wrigley said.
In addition to the sales and excise tax, the property that may have sat fallow is now worth more and creating more property tax revenue.
“It’s a little extra but the product is there, and the price will come down,” Wrigley said.
Wrigley said the growth Michigan is seeing now, is nowhere near over.
“We’re very early in the growth cycle, if you talk about icebergs, that 10 percent that’s above the water, there’s still 90 percent yet to go,” he said.