Opening a cannabis dispensary comes with significant barriers, but West Michigan entrepreneurs are looking at opportunities other than retail storefronts to get their foot in the door of the burgeoning industry.
Michigan voters allowed for a wave of new businesses when they approved the Proposal 1 ballot initiative in 2018 to legalize recreational cannabis. While licensing and zoning red tape, as well as a high start-up costs, have served as obstacles for individuals looking to open a dispensary, many are finding ways to work in the cannabis space without opening a storefront.
“Creating a dispensary is the most well-known side of the recreation industry,” said Grand Rapids resident Erica Tyler, who is planning to open a cannabis processing or safety compliance facility. “That is going to begin to be a saturated market at some point, so why not create a business where they have to come through our door (first)?”
Tyler is a member of the recently launched Fluresh Accelerator, a business incubator and education program launched by Fluresh LLC for local businesses and entrepreneurs to enter the cannabis industry.
“It’s disheartening to know that so much information is available to those that have the money and connections,” Tyler said. “The things that I have learned are things I didn’t even know existed.”
Wormies Vermicompost is another startup in the Fluresh program. The company launched in 2018, and after Prop 1 got a boost in business from home growers and caregivers looking for high quality soil to grow cannabis, said owner Luis Chen Aguilera.
The Grand Rapids-based company has a compost pickup service for households and restaurants, and also sells worm castings — a high-quality natural soil amendment for organic gardening — and a variety of other soil products.
“At the beginning of starting the business I didn’t have a big market, but once the industry came into place for cannabis they all started buying from me,” Aguilera said. “Craft cannabis growers or people with small operations care a lot about the plant. That industry coming into place really helped Wormies expand composting operations.”
Aguilera is now looking into how Wormies could become a licensed facility to compost cannabis waste, which currently is mostly going to landfills, Aguilera said. Using a plant’s own biomass as compost for when it is grown also provides numerous benefits.
“When we talk about growing organically, that’s the dream,” Aguilera said. “The microorganisms that we would be culturing in this compost would be grown in the place where they are going to thrive and where they are needed. It just makes sense.”
Wormies is in the process of gathering more information on how to properly compost cannabis waste, and seeking clarity about proper licensing from the state, Aguilera said.
The Michigan Marijuana Regulatory Agency has various requirements for how to dispose of cannabis waste, including destroying the waste until it is rendered “unusable and unrecognizable” and recorded in the state’s monitoring system. Cannabis waste must then be disposed of into a landfill, a compostable materials operation or facility or an in-vessel digester.
Marketing, branding cannabis
“You don’t have to touch a plant to be a part of what’s going on,” said Roberta King, owner and founder of Canna Communication, which assists with marketing efforts for medical provisioning centers, dispensary owners and other cannabis-related businesses. She was referring to the ancillary business opportunities in the cannabis market.
King started Canna Communication after she left her job as the Grand Rapids Community Foundation’s vice president of public relations and marketing. She wanted to find a way to start her own firm that would provide her more flexibility toward the end of her career.
King often works with municipalities to help destigmatize cannabis and aids clients by advocating for changes in local regulations. Many cannabis business owners are also unaware of the unique way cannabis businesses are prohibited from advertising on mainstream search engines and social media channels because cannabis is still illegal at the federal level, King said.
“You have to rely on a lot of public relations, and (search engine optimization) content, as well as personal, relational tactics,” King said. “It’s also a lot of face-to-face with customers and in-store promotions.”
This also led King to secure a marijuana events organizer license. The city of Muskegon, where King resides, is one of the few cities in the state that has opted in to allowing marijuana events. She is planning to work with the city and Park Place Provisionary to hold an outdoor event this July.
“It fit with what I was doing more than anything else and seemed like a good opportunity,” King said. “Events like this will help destigmatize cannabis a bit more and get people to realize it is legal, just like a beer and wine tent at an event.”
Being creative with an entrypoint into cannabis can open up different opportunities along the way, said Sarah Tupper, co-founder of Sarah Jane, which she launched in 2018 with her business partner, Jessica Lind.
The Grand Rapids-based cannabis brand launched its first line of products in 2020, including microdose gummies, cannabis spray and pre-rolls that are carried in six different dispensaries across the state. Sarah Jane is marketed toward women who perhaps have not tried cannabis before or have not been to a dispensary but want to try it for the first time, Tupper said.
“We thought there was a gap in the Midwest market where we really felt like nobody was speaking to this demographic,” Tupper said. “That’s how our business model evolved — to not only wanting to be a company geared toward products, but also resources, education, community engagement and just a place for women who are looking for some honest dialogue about how to integrate cannabis into their life.”
Launching the Sarah Jane brand has been a “great first step” to getting into the cannabis industry, and will allow them to explore expanding their products or see what other opportunities they can take with the brand, Tupper said.
“It really offered us that really intense education really quickly and an awesome window into meeting so many other women who have been so supportive of our message and our brand,” Tupper said.