As oversupply hammers prices and the industry remains walled off from other states’ markets, Michigan’s largest cannabis company is heading south to sell a different kind of weed.
Evart-based Lume Cannabis Co. has founded a new company, Lume Hemp Co. in Florida, to capture a portion of the massive and growing national market for hemp-derived THC.
The national cannabis landscape is a complicated web of state laws and a federal loophole that’s created dual industries competing for dominance. THC derived from hemp, legal under federal rules, is rapidly proliferating across the country, even in states where recreational cannabis isn’t legal.
The 2018 Farm Bill effectively removed hemp’s designation as a controlled substance, stating that any cannabinoid derived from hemp — defined as cannabis containing less than 0.3% THC by dry weight— could be sold in the market, free of federal intervention.
Due to the rules, with enough additive ingredients, gummies and drinks could be created to offer similar psychoactive effects to traditional marijuana that’s heavily regulated in states like Michigan.
This has led to a recent boon for operators in other states — as Michigan regulates all hemp and cannabis products, regardless of the Farm Bill — who can not only federally produce THC products, but can ship them across state lines from states like Michigan that don’t allow exports of cannabis.
Oregon-based Whitney Economics projects “conservatively” that the hemp-derived cannabis market in the U.S. hit $28.4 billion in 2023, the same size as the craft beer industry, and growing exponentially.
Meanwhile, Michigan’s marijuana THC market — the nation’s strongest in marijuana sales per capita — is plateauing under intense pricing pressure.
Prices have fallen more than 28.6% since January 2024 to an average cost of $66.50 for an ounce of marijuana in the adult-use market last month. Those are the lowest prices in the country. In Oregon, the average cost of a gram of marijuana flower in January was $3.50, or about $99.22 per ounce.
Read the rest of the story at Crain’s Detroit Business
