Big Rapids cannabis market shows signs of oversaturation

Big Rapids cannabis market shows signs of oversaturation

5 dispensaries shut in metropolis inside final 12 months

BIG RAPIDS — Five cannabis dispensaries have closed within the metropolis of Big Rapids over the previous yr, elevating questions on whether or not the town of practically 9,000 individuals is an early instance of market oversaturation.

City officers have adopted an open coverage for cannabis retailers by avoiding capping the quantity of cannabis companies that may function throughout the metropolis limits. As a outcome, the quantity of dispensaries within the metropolis blossomed to as many as 14 retail storefronts since cannabis gross sales first began within the metropolis in March 2020. 

However, the native market has skilled its share of churn. 

The newest to exit was Grand Rapids-based, vertically built-in cannabis firm Fluresh LLC, which closed a dispensary at 520 S. Third Ave. in Big Rapids earlier this month, solely three months after opening. Other dispensaries to shut their doorways within the metropolis over the previous yr embody Wellflower, Mother Nurtures, KKind and Alluvion Cannabis Co.

Shoran Reid Williams, basic counsel and chief regulatory officer at Fluresh, mentioned the choice to shutter the Big Rapids location so shortly stemmed from the native market saturation and several other different contributing components.

“Five different retail areas opened their doorways on the identical time we did, and the market couldn’t maintain that a lot provide — it simply couldn’t,” Reid Williams mentioned. 

The firm, which operates a dispensary in Grand Rapids, discovered that including a second retail location in Big Rapids proved to be a “logistical nightmare” and wasn’t worthwhile, Reid Williams mentioned. 

Fluresh bought the Big Rapids constructing from Mother Nurtures, a dispensary that operated within the location earlier than closing in January 2022. According to a press release on the time, Mother Nurtures closed the enterprise as a result of of the results of inflation and COVID-19, the aggressive nature of the native cannabis business and excessive value of proudly owning a dispensary.

For Fluresh, the short-lived foray into the Big Rapids retail market helped the corporate alter its market technique, Reid Williams mentioned.

“At the top of the day, what we determined is we’re a wholesale flower firm. In order to successfully try this, we didn’t actually wish to compete with our clients,” Reid Williams mentioned. “We determined to have only one retail location. We have been going to open one other one in Adrian by our develop operation, however as a substitute we’re specializing in our singular (Grand Rapids) location to raised resolve what clients need.”

Building a model was not as vital when leisure cannabis was first legalized, however it has turn into an important issue for firms to stay in enterprise, mentioned Ben Wrigley, accomplice at Cascade Township-based CannaLex Law

As effectively, many of the early entrants within the business probably didn’t perceive all of the dangers, which led to a string of dispensaries closing throughout the state, Wrigley mentioned.

“Many of the early operators overpaid for the situation they’re at, and perhaps they weren’t prime enterprise individuals,” Wrigley added. “Everyone complains there aren’t sufficient communities opted in, however in the event you’re open proper now, the very last thing you need is these surrounding locations to choose in.”

Wrigley contends that if extra neighboring states begin legalizing leisure cannabis, the speed of Michigan dispensaries closing will solely enhance.

Despite the market challenges in Big Rapids, the town has skilled a gentle stream of curiosity from individuals eager to open up new cannabis companies, mentioned Paula Priebe, the town’s former group growth director. Before taking a place on the metropolis of Walker on the finish of 2022, Priebe labored for Big Rapids for 5 years and oversaw a lot of the cannabis licensing course of throughout her tenure. 

“We see some of the companies shut, and normally a brand new enterprise will are available these areas. That has occurred a couple of occasions,” Priebe mentioned. “These are primarily vacant storefronts to begin with and so they have been renovated very properly. They’re normally phenomenal renovations which might be activating buildings in disrepair. That makes it extra probably {that a} new enterprise may come, even in one other business.”

Aside from one occasion, Priebe mentioned all of the cannabis companies in Big Rapids renovated older buildings to open within the metropolis. 

She thinks Big Rapids’ uncapped market for cannabis companies nonetheless is sensible, regardless of the present uncertainty.

“Ultimately, it’s not the town’s position to resolve what companies do and don’t transfer ahead,” Priebe mentioned. “The metropolis doesn’t restrict the quantity of hair salons you’ll be able to open. It’s as much as you or individuals within the business to resolve whether or not it’s a very good choice to take. That held true my entire time there.”