GRAND RAPIDS, Mich. (WOOD) — The number of cannabis retailers has soared as more locations open in Michigan.

Growing competition, especially from major corporations, has led to a more challenging business environment.

Smaller, locally-owned operators like Pharmhouse Wellness in Grand Rapids have noticed the change, according to Founder and CEO Casey Kornoelje.      

“Competition is increasing right now,” Kornoelje said. “What we’re seeing is the approximate 30 licenses that were issued — at least in the city of Grand Rapids — slowly beginning to evolve and open up.”

The business has recently invested in cultivating its own product through a new grow site.        

Pharmhouse Wellness was recognized as the state’s first gold qualifier on Wednesday. The business won the new Social Equity All-Star Program award presented by Andrew Brisbo, the executive director of the state’s Cannabis Regulatory Agency.

Part of the businesses program included projects like planting trees and other improvements to the neighborhood working with local partners.   

“We’ve been able to give back approximately ($200,000 to $250,000) into neighborhood development and beautification efforts,” Kornoelje said.

The head of the CRA said the agency is focused on helping communities disproportionately impacted when marijuana was illegal in the state.

“The agency has to issue licenses to everyone who qualifies, so we don’t have control over the number of businesses that operate in the state,” Brisbo said. “What we do try to do is to establish a regulatory system that is fair and reasonable for businesses of all sizes and we give special consideration to smaller businesses that may face more challenges in terms of complying with the regulatory environment.”

The agency expects additional growth but acknowledges the challenges in the industry.

“I think the market is still growing in Michigan but it sort of grows in fits and starts, so in the early stages we had an abundance of retail locations without adequate supply,” Brisbo. “Now it seems as though the strength of the industry has almost shifted where there’s tremendous supply but the expansion of retail locations hasn’t quite kept up and that’s all within the hands of municipalities in terms of participation.”

Pharmhouse expects to see some closed signs at other businesses even as new sellers enter the market.

“For some folks that have gotten ahead of themselves, gotten a little outside of their skis perhaps expanded too big or opened up a facility that’s bigger than they can handle. We’re seeing cracks in the market and we’re seeing operators unable to compete,” Kornoelje said.

The state plans to give out additional social equity awards to cannabis businesses that qualify.