When big marijuana money came to small U.P. towns: Key takeaways from MLive’s reporting

In a series of stories published from Dec. 5-7, MLive examined the impact of legal marijuana along the western border of the Upper Peninsula.

Reporting looked at the how the new industry is reshaping small and scenic former lumber and mining towns, the reliance on out-of-state cannabis connoisseurs, law enforcement’s response and complex legal battles surrounding the efforts to expand marijuana commerce in the city of Menominee.

Here are key findings of the reporting:

The border is lucrative

Shops aren’t opening along the border because U.P. residents consume an inordinate amount of marijuana; it’s because the location attracts pot pilgrims from other states – Illinois, Minnesota and predominantly Wisconsin – who prefer the easy access, variety, quality and cost of Michigan’s market.

Marijuana store representatives told MLive as much as 85% of all sales are attributed to out-of-state customers.

The Cannabis Regulatory Agency (CRA) doesn’t release store-specific sales figures, but analysis of cumulative data reveals stores were averaging $350,000 in sales per month in September, which translates to $5.25 million monthly or $63 million a year for the 15 stores currently operating along the UP border.

Long drives

Border business draws customers from far away. While some Michigan customers traveled a short distance from Wisconsin, the majority said they drove several hours roundtrip to stock up at Michigan stores.

In one instance, a pair from Minnesota spent 10 hours roundtrip to shop the Michigan stores.

Multiple customers said Michigan’s loose purchase limit rules drew them in, since it allows them to stock up for months at a time.

Competing marijuana legalization state Illinois limits out-of-state customers to 250 mg of THC contained in infused edibles.

For a package of gummies, that would mean a limit of about two 10-piece packages.

In Michigan, there are no additional restrictions placed on out-of-state sales, and the limits would allow a customer to purchase nearly 20 equivalent bags of gummies. Furthermore, Michigan limits are set per transaction, so a customer may shop multiple stores or return to the same store any number of times per day.

Lower taxes

Out-of-state customers frequently complained about the high tax rates in Illinois. Michigan marijuana retailers add 16% in taxes, including a 6% sales tax and a 10% excise tax.

Illinois’ tax scheme for marijuana is much more complicated and results in signficantly higher costs for consumers.

Illinois cannabis customers pay on average nearly 9% in combined state and local sales tax, and from 10% in excise tax on marijuana products with less than 35% THC potency, up to 25% excise tax on marijuana with greater than 35% THC potency. For certain potent marijuana products, such as vaping cartridges, customers may pay nearly 34% in taxes.

This is on top of Illinois’ 7% “cultivation privilege tax” that’s tacked onto wholesale transactions – and likely passed along to consumers.

Related: Weed on the border: What happened when marijuana money came to small U.P. towns

Contraband

Most marijuana customers along the Michigan-Wisconsin border run a law enforcement gauntlet.

Since the first Michigan marijuana shops opened in December 2019, Wisconsin police have seen a noticeable increase in the number of motorists traveling with illegal marijuana, leading to increases in tickets and ticket revenue.

Police in the city of Marinette, Wisconsin, just over the bridge from Menominee, gave out 548 marijuana possessions citations in 2022 compared to 129 in 2019.

In Florence County, where a stretch of U.S. 2 runs from Michigan to Wisconsin and back into Michigan, sheriff’s deputies issued four citations for marijuana possession in 2019 and 83 in 2022.

Jobs

An immediate positive economic impact of marijuana shops is the jobs they bring. Stores told MLive they were employing between 15 and 25 people, on average. That translates to a between a 1% and 3% increase in available jobs to the smaller communities, some with as few as 1,600 residents.

And the jobs are desirable. Michigan budtenders earn about $15 per hour, and when tips are included, some retail employees report earning in excess of $20 per hour.

MLive spoke to several employees who left steady jobs — health workers, retail store managers and a police dispatcher – to work at marijuana shops.

One woman employed by Rize in Menominee said she drives an hour each way to work and has no regrets.

Chains reign

The race to open along the western UP border is being largely won by marijuana retail chains, some that focus on the UP and others with a statewide presence.

Lume, Higher Love, Fire Station, Greenpharm, Nirvana Center and Rize all have multiple locations throughout the state and the U.P.

Glazed and Confused in Mastodon Township near Crystal Falls is the only non-chain marijuana store on the Wisconsin border.

Lawsuits

The most ferocious marijuana border battle is taking place in Menominee, a town with about 7,400 residents where at least eight marijuana shops hope to open.

Five of those stores are currently open for business.

Menominee is one of the nearest Michigan cutoff points for southern and central Wisconsin cannabis customers.

The first of nearly ten lawsuits, including appeals, were filed against the city of Menominee in September 2021. Two lawsuits remain unresolved.

More on the Menominee lawsuits:

Judge orders 3 marijuana shops to close in Michigan U.P.

Judge allows 3 shuttered marijuana shops in Michigan U.P. to reopen

‘The toothpaste has left the tube’: Ethical concerns, conflicts of interest emerge in U.P. weed war