Takeaways from Our Conversation on Michigan Cannabis Sales

By | September 21, 2023

Michigan cannabis sales are a great story. Sales there reached another record in July, hitting $277 million for the month, and look to head well over $3 billion for the year.

What’s going on there? The state is still fairly new to the cannabis game, with official adult-use sales rolling out in late 2019. So, there’s the “still novel” argument to be made.

Some have maintained the state’s regulators learned from other states that have gone before, and have created a structure more conducive to growing the industry. An easier point might be made: the Great Lakes State is surrounded by non-legal or limited-sales states, benefitting Michigan operators.

This is all good news for operators in the state, as well as the specialty brokers who serve them.

Mallory Czuchra

Mallory Czuchra is cannabis program manager for Rockall Insurance Agency, a managing general underwriter that offers services to the cannabis industry. Her firm is feeling the good vibes from all this growth, and she expects things to continue to hum along in Michigan.

For our latest Insuring Cannabis podcast episode, we spoke with Czuchra about what is going on in Michigan.

Following are takeaways from that conversation.

“We are seeing an increased number of submissions coming from Michigan, which is consistent with the higher number of retailers opening,” Czuchra said. “We’re also seeing an increase in sales, projected revenue for many of our renewal clients over the prior year. A lot of insureds that carried the minimum required coverages and limits are increasing those as they kind of move out of a startup or build out phase into more of a growth mode too.”

She got into rates and whether her clients are seeing lower rates, or better terms.

As with other areas, her clients have seen liability rates drop.

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“At a high level, as sales increase rates tend to lower products, liability rates aren’t dropping as much as a line like property,” she said. “We’re hearing property rates in the cannabis space are dropping to an extent that deviates from sort of the overall commercial property trends. For our program, we rate according to sales by operational type and to some extent by product type rather than applying one rate or one rating factor to all operations or all products. So that means the final rates and the premium is going to more accurately reflect the actual risk.”

As an example, she offered a seller of vape products, which will get a rate proportionate to the amount of vape they sell.

“So, a vape underwriting factor is not going to apply to the flower and pre-roll sales that they do,” she said. “Generally, pre-roll sales continue to grow, so they’re making up a higher percentage of total sales, and that also helps, keeps the rate lower.”

She also addressed how the growth is affecting their operations, and how she feels about the firm’s growth going forward.

“We’re really excited about the growth in Michigan specifically. It’s one of our top, I think two or three states, in terms of premium right now,” she said. “So, it’s a very exciting state. It continues to grow. We will definitely continue to pump more resources into Michigan specifically as opposed to a state like Washington that kind of is high volume, but sort of smaller accounts – just the way that they’re structured.”

She added: “So we’re definitely really excited to continue supporting the insureds and the clients in Michigan and continue growing there with everybody.”


Topics Michigan Cannabis

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