Strata Business Services LLC is a “specialized small business solutions company” that focuses on investments in the medical marijuana sector in Michigan and other states. As of Dec. 6, adult-use recreational marijuana became legal in Michigan after voters approved Proposal 1 during the midterm election. General Manager Mark Guzniczak thinks the state should learn from its slow process of unveiling regulations around medical marijuana businesses and apply that scheme to recreational marijuana.
What opportunities are there for companies that have started working in the medical cannabis sector to expand with recreational marijuana?
Obviously, medical is progressing slowly. We’re really 18 months out before rules are promulgated and applications are accepted for recreational. There are still a lot of questions and unknowns on how the regulatory structure will look around recreational marijuana, and there will be an opportunity for coexistence between the medical side and the recreational side, but obviously, the purchase intent is different. Recreational marijuana is more like alcohol. I think there’s space for both. I think there may be some operators who look for a combination of that, although without knowing what the rules and regulations are, it’s a tough one for anyone to predict.
What would help address some of the challenges for the industry?
For (the Michigan Department of Licensing & Regulatory Affairs) and the state licensing board, this was very new ground for everyone as they started into this process with accepting applications, creating emergency rules, creating the permanent rules that went into effect late last month. It’s been a slow progression and it’s been a learning curve, as it is completely new ground for the regulators. The issue has become that facilities have been licensed, and all the different license types have been issued; however, with the regulations in place there’s a shortage of product. Even growers that had licenses approved mid to late summer or early fall will not have crops ready to be part of the licensed, regulated system for several months. I think LARA is looking into that.
Do you see any lessons that could be learned when regulating recreational marijuana?
Absolutely. Sort of going back and examining where (medical marijuana regulation) started, the steps in the process, maybe where that could have been improved, where things could be … streamlined. I think it just needs some good study as to ‘OK, here’s what we went through, how can we do this better the second time?’
What do you think would help the industry grow in the next year?
Obviously, based on the ballot proposal passing, there’s a high citizen interest in the recreational side. Good solid business operators operating in the regulated system, being good business citizens and good business neighbors in the communities where they are able to operate, will show that this can be a good welcome business. It can be very straightforward, and an open business that follows the rules. If I was to give you a crystal ball prediction, five years from now, I would probably say that if all goes well with the regulatory process and the system works, it would look very much like a liquor store.
How do you think the state’s new administration is going to approach the industry?
I think the new administration is going to approach the industry from a standpoint of looking at opportunities for revenue. That’s a component of it, but it’s not the only component of it. I think they’ll look at the medical side, as far as how they can help to strengthen the supply chain so registered patients can get the medicine they need. I think they will probably help in that educational process when they go back and look at, ‘OK what did we do over the last 18 to 24 months with this process, what can we improve on here?’ It’s still keeping it a highly-regulated industry, and then (asking) what can we learn as we take that on to the recreational side.
Interview conducted and condensed by Sydney Smith.