Former NBA player Al Harrington made a big bet on Detroit, choosing the city as the location of his national cannabis company Viola‘s only cannabis dispensary.
About four years after the medical marijuana retail store opened, 4473 W. Jefferson Ave., on Detroit’s riverfront just west of downtown, he’s suspending operations indefinitely in Michigan. Viola also has a marijuana grow facility in Detroit next to the store, which grows marijuana plants for Viola products sold around Michigan.
Many of the reasons behind Harrington’s decision to suspend all operations in Detroit are common issues other cannabis companies share: Profit margins on products have declined as prices of cannabis products dropped significantly over the last few years. Declining medical marijuana sales mean cannabis companies without licenses to sell recreational marijuana are likely struggling.
But the biggest blow to Viola — and one that Harrington believes other cannabis companies are experiencing — is that the company’s insurance provider, Obsidian Specialty Insurance Co., has refused to cover several claims Viola has made in the past year, including one made when the power went out at the Detroit facility during an ice storm in February that also knocked out power to about 700,000 Michigan residents and businesses. Many of Viola’s marijuana plants died as a result.
“When the people that are supposed to be there to support us — that we actually pay to do a job for us and to provide a service — they don’t do it, it’s tough,” Harrington said. “It’s defeating.”
A leak from a snowstorm that damaged products at Viola’s facility, also in February, and a theft in October, led Viola to file three insurance claims totaling $8.9 million.
Obsidian Specialty Insurance Co. declined to comment for this story.
Harrington talked to the Free Press last week about what led to his decision to suspend operations in Michigan, the challenges companies in the cannabis industry face and what to expect from Viola moving forward.
This story appeared in the Detroit Free Press