Could Michigan Be the Perfect Entry Point for Cannabis Investors - Seite 3

Linton's former outfit Canopy Growth Corporation (NASDAQ: CGC) (TSX: WEED) doesn't currently have assets on the ground in Michigan, but it does sell its Martha Stewart brand of CBD products, including gummies to the state. Although Canopy's Executive VP and CFO Mike Lee earned his MBA from the University of Michigan, the cannabis giant's connection to Michigan has no official status at this stage.

In fact, there's more rumor of Canopy's interest in New York, upon that state's potential legalization of marijuana in the near future. To enter that market, Canopy has the option to acquire US company Acreage as soon as that's federally permissible—which is a scenario many more are seeing could come to fruition under the current government.

Back in September of 2020, Innovative Industrial Properties, Inc. (NYSE: IIPR) entered the Michigan market through the acquisition of a property in Madison Heights. The deal came with a long-term, triple-net lease agreement with a subsidiary of Holistic Industries Inc. to operate the property as a regulated cannabis cultivation, processing and dispensing facility, upon completion of development of an approximately 63,000 square foot industrial building. 

Now IIP has multiple interests in Michigan, including with Ascend Wellness, Emerald Growth Partners, Green Peak Innovations, LivWell, Holistic Industries, and even a 115,000 sq ft industrial facility rental involving Cresco Labs Inc. (OTC: CRLBF) (CSE: CL) that's currently under redevelopment.

Cresco's co-founder and CEO Charlie Bachtell is now leading the way as Chairman of the National Cannabis Roundtable, a trade organization and lobbying group. The group is working behind the scenes on behalf of the Secure and Fair Enforcement (SAFE) Banking Act. The measure aims to give traditional banking access to pot companies, enabling them to offer credit purchases to clients, instead of operating in a cash-only mode.

Despite the unique banking challenges the company continues to have to operate under, Cresco ended the third quarter with $58 million in cash and cash equivalents and no debt. Management signalled its plans to use those funds to expand their cultivation facilities in multiple states, including Michigan, without the need to raise additional capital.

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