Michigan is the latest state where marijuana retailers are charging manufacturers and brands for premium shelf or display space – a practice expected to gain prominence nationwide as new recreational markets open and others expand.
Local advocates contend the practice of charging extra fees for coveted space is simply a cost of doing business and both partners benefit, particularly in Michigan’s close-knit, heavily vertically integrated industry.
But opponents counter that so-called slotting fees are just another economic squeeze, a pay-to-play ploy that could price out small operators, especially minority-owned companies and social equity licensees.
Slotting fees, common for decades in traditional retail, are a relatively new trend in cannabis.
Troy, Michigan-headquartered Cloud Cannabis Co. is among the companies weighing far more slotting-fee proposals these days from local retailers interested in offering the operator’s wholesale Mitten Extracts and Wonderbrett brands.
All the pitches are from larger state retailers – those with more than six locations – that want to lock in these fees across their retail network, according to Nic Shafer, vice president and director of marketing.
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