![]() “We were prepared for falling prices,” Kevin Kuethe, Lume’s chief growing officer, told Crain’s in March while working in one of the Evart operation’s 20 flower rooms filled with a strain called Uncle Bruce. ![]() The Company expects to complete in 2024 a more than 150,000 square foot expansion of its existing 250,000 square foot cultivation facility in Evart, which houses 28,000 plants valued at approximately $39 million. (KC Crain and Chris Crain of Crain’s Detroit Business parent, Crain Communications Inc., are small investors in the company.) Lume’s principal investors include Bob Barnes and Don Barnes, co-owners of Belle Tire, and Dave Morrow, founder of Warrior Sports. But the company still remains the largest marijuana retailer in the state by store count, accounting for closures and openings, with 32 stores planned. Lume’s closure of rural stores in favor of larger metro areas could indicate that higher volumes are critical to profitability. ![]() A pure volume game is not good for anyone. Everyone has to have a certain profit margin to do it. There are license fees, insurance premiums, operating costs and we don’t have to write off like other companies do. “Even for us, there is such a thing as underpricing. “When ‘croptober’ comes into play (when outdoor grows are harvested in the fall), the price will continue to fall,” Millen said. Jerry Millen, co-owner of the Greenhouse of Walled Lake pharmacy, told Crain’s that the industry is in “chaos”. “In 2022, deposits for most licensed businesses are down 25 to 50 percent from 2021,” Zillgit wrote in an email to Crain’s. Ray Zillgit, senior vice president of risk management and general counsel at Brighton-based Lake Trust Credit Union, said deposits from marijuana customers have fallen sharply in recent months, suggesting margins have been much tighter since the cost of marijuana continues to fall. The price of recreational marijuana fell to $130.62 an ounce in May, down more than 40 percent from a year earlier. ![]() The industry continues to experience upheaval as marijuana prices have plummeted in recent months due to oversupply. The affected employees will receive severance pay and the opportunity to apply for positions at other Lume locations, the company said in a press release. “We remain committed to growing and deepening our retail presence in communities throughout Michigan and continuing our efforts to provide quality cannabis products to patients and adult consumers.” “This realignment is an important part of our strategy to maintain and strengthen our position as Michigan’s premier cannabis retailer,” said Doug Hellyar, Lume’s President and COO, in the statement. In an emailed statement to Crain’s, the marijuana grower and distributor said it will also be opening three new stores in Ann Arbor, Grand Rapids and Portage in the coming months. confirmed it will be closing its stores in Southfield, Bay City, Cheboygan and Christmas in the Upper Peninsula. Michigan’s largest cannabis company is closing four dispensaries statewide in what it calls a “realignment.” ![]()
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