35 dispensaries seeking to open in New Buffalo Township at Indiana state line in cannabis gold rush, new high for Michigan (2024)

Northwest Indiana and greater Chicagoland residents have long flocked to Southwest Michigan for beaches, sand dunes, wineries, craft breweries and farmstands.

Harbor Country, a getaway filled with summer homes, Airbnbs and outstretched beach blankets, is starting to lure visitors with a new form of recreation.

The Rolling Embers, URB and The Bloomery cannabis dispensaries recently opened off Exit 1 on Interstate 94, the first exit past the Indiana/Michigan state line. King of Budz, a chain with locations inMonroe, Ferndale and Detroit, also is building out a retail store just off the interstate highway there.

JARS Cannabis is slated to open on U.S. 12 in New Buffalo just across the state line in the shadow of the Welcome to Michigan sign in May. Pharmhouse Wellness, a dispensary with a location in Grand Rapids, also will open a mile north on U.S. 12 this spring.

While it may already seem like dispensaries are opening left and right near the border of Indiana, where marijuana is still prohibited, it's just the start. So many cannabis dispensaries are seeking to open in Southwest Michigan's Harbor Country that Northwest Indiana may get a contact high.

A total of 35 applications have been filed to open dispensaries in New Buffalo Township, Building & Zoning Administrator Estelle Brinkman said. Several but not all have already won approval through the special land use process, she said.

No dispensaries are currently located within the city limits of New Buffalo, City Manager Darwin Watson said. But the unincorporated New Buffalo Township around the beachfront town known for its lighthouse, marina and languorous summer days in the sand and surf could reach a statewide high.

"That's more than Ann Arbor, Detroit or Lansing if all 35 get licensed," said David Harns, a spokesman with the Michigan Cannabis Regulatory Authority. "That's more than anywhere in the state if all 35 get licensed. Detroit had 33 at the end of the year. More may be opening there, but it would at least end up in the top two or three."

About 4.3 million people live in the Detroit metropolitan area, compared to about 2,400 in the much less densely populated New Buffalo Township with its blueberry farms and apple orchards. If all the projects get approved, financed and built, the township would end up with roughly one dispensary for every 68 residents. But New Buffalo Township, which hugs Lake Michigan and LaPorte County in Indiana, serves as the gateway to Michigan's Lake Michigan coastline, a popular summer destination, and borders Indiana, which is one of just 12 states where marijuana is still completely illegal.

Most of the dispensaries plan to open right by the state line on U.S. 12 or off Interstate 94. Some operators are looking to open more than one dispensary in New Buffalo Township. Casey Kornoelje, who's opening Pharmhouse Wellness on U.S. 12 about a mile north of the state line, estimates dispensaries will invest between $50 million and $100 million in New Buffalo Township.

"It's an amazing amount of investment along U.S. 12 cleaning up blighted properties," he said. "If all 35 licenses are granted and each pays a remittance of $60,000, that's $2.1 million raised in taxes for perpetuity for New Buffalo Township. We're already watching it unfold."

Last Year, Michigan's 10% marijuana excise tax generated $290.3 million in tax revenue, said Ron Leix, a spokesman for the Michigan Department of Treasury. More than $87 million was distributed to municipalities and counties across the state.

"Legalization of marijuana creates a substantial new source of tax revenue for the state. In 2022, Illinois reported $467 million in sales tax revenue generated from marijuana sales, while Michigan reported $341 million,"Indiana University Northwest Assistant Professor of Economics Micah Pollak said."A 2023 study by the Tax Foundation found that Indiana may be missing out on $172 million in marijuana tax revenue. While this revenue reflects a relatively small portion of the overall budget, such revenue could offset a significant portion of revenue generated currently through gasoline and fuel taxes."

The dispensaries also have a measurable economic impact, especially with the creation of new jobs, Pollak said.

"Legalization of marijuana does tend to have a positive economic impact, consistent with the creation of a new licit industry. A 2023 study found that states which legalized recreational marijuana saw in a modest but significant increase in employment, particularly in the agricultural sector," Pollak said. "Another study from Ohio State found that legalizing recreational marijuana resulted in a statistically significant increase in employment growth, home prices and population after five years."

Monroe, Michigan, just north of Toledo, Ohio, has experienced a similar economic boost as New Buffalo Township is now seeing. It's home to at least 16 dispensaries with more on the way as a result of recreational marijuana not being legalized in neighboring Ohio, a short distance away, until a few months ago.

Differing state laws often induce cross-border commerce. So many fireworks stands, smoke shops and gas stations line the Illinois border in Northwest Indiana because Illinois prohibits fireworks and charges higher taxes on gas and cigarettes. Hoosiers used to hop the border into Illinois when Sunday alcohol sales were still prohibited and flock to Calumet City's infamous "Sin Strip" of neon lights, showclubs and go-go dancers along State Street.

"Cross-border commerce driven by differences in laws does occur across the United States. However, when it persists this is usually at a cost to one side, in the form of either lost tax revenue or the additional cost of enforcing laws inconsistent across borders. In the case of recreational marijuana, we have seen most states follow the lead of their neighbors as the economic benefits become clearer and there has been almost no evidence of any potential downsides," Pollak said. "A 2021 study by the Cato institute found that legalization of recreational marijuana did not have any impact on road safety, suicide rates or crime rates. This is consistent with several other more recent studies."

The National Institutes of Health found that 15 research papers found a relationship between marijuana legalization and an increase in traffic accidents while five studies found none. The National Policing Institute said legalization can create challenges for law enforcement, such as an increase in driving under the influence.

"Post-legalization, average state income grew by 3 percent, house prices by 6 percent, and population by 2 percent. However, substance use disorders, chronic homelessness, and arrests increased by 17, 35, and 13 percent, respectively," Jason P. Brown, Elior D. Cohen, and Alison Felix wrote in a September 2023 research study for the Federal Reserve Bank of Kansas City. "Although some of our estimates are noisy, our findings suggest that the economic benefits of legalization are broadly distributed, while the social costs may be more concentrated among individuals who use marijuana heavily."

The research is still young but early findings have been generally consistent, Pollak said.

"Overall, legalization of recreational marijuana has consistently had a positive, albeit relatively small, economic impact on state and regional economies," he said.

Michigan legalized medicinal marijuana in 2008. Voters approved recreational marijuana in the Wolverine State in 2018 and it became legal in 2019.

The cannabis industry now employs 35,000 workers around Michigan at retailers, processors, labs and farms,Harns said.

Southwest Michigan already is home to many dispensaries, including High Profile, Zen Leaf, Pinnacle Emporium Buchanan, 7ENGINES Cannabis Dispensary, Cannavista Wellness, Lifted Craft Cannabis and Mill Valley Hemp Co. in Buchanan. Buchanan, a city of about 4,200 not far from the state line, has seven dispensaries and only one bar that's not a craft brewery or part of a restaurant. The McCoy Creek Tavern closes at 9 p.m. on weeknights and 10 p.m. on weekends to give some idea of how quiet the town is.

Harbor Country Collective, which was founded by DanMilsk and Northwest Indiana native Adam Kaufman, became the first to do business in Harbor Country when it opened in Three Oaks in 2022. The owners originally got involved in the business when Michigan first legalized cannabis for medicinal purposes, have amassed a global seed bank of more than 200 strains and operating an in-house breeding program of classic flavors like Acapulco Goldand modern strains like Animal Mints. The vertical cannabis company grows everything it sells, likening itself to a farm-to-table restaurant.

"Harbor Country Collective distinguishes itself as the only store producing its own flower in Harbor Country," Milsksaid. "As a locally owned mom-and-pop vertical cannabis company, HCC provides a personalized shopping experience, setting it apart from the large corporate competitors coming into the area. HCC was not merely established to enter the trendy cannabis industry; it was built on a foundation of love for the plant."

New Buffalo Township recently rewrote its zoning ordinance to not require setbacks for dispensaries, which opened up lead the the boom in investment, said Marvin Yono, co-founder of URB Cannabis Company. The township broadly allowed marijuana establishments in three designated areas by the state line.

"They didn't limit it with zoning, setbacks or different overlays because they didn't want lawsuits from businesses," he said. "They didn't want to get sued over their process. They have no limits. Some ordinances are so strict it can't be within a 1,000 feet of a school or a church. Basically this makes all parcels eligible. It allows as many new businesses as can fit."

URB, which also has locations in Monroe and Vassar, claims to be Michigan's largest cannabis superstore. It's been building its biggest store yet in New Buffalo.

"We're the largest in the state of Michigan with the largest selection, the best value, the best service and the best prices," he said.

URB took over the former Sure Stay Hotel just off I-94. It demolished part of the building and is renovating part of it into an 8,000-square-foot store that employs 140. It's now open while the construction work continues.

It sells a variety of products, including edibles, flowers, vapes and concentrates, stocking thousands of products. Yono knows more competition is coming.

"It's always good to establish the market," he said. "It's inevitable there will be some contraction. The best operators and best establishments will thrive."

Pharmhouse Wellness is a 2,500-square-foot store that will employ 20 to 30 workers. It will stock at least 500 products, including popular brands like Platinum Vape, Stiiizy Pods, Grown Rouge, Michigrown, Cali Blaze, Ice Kream Hash, H.O.G., Presidential and Caviar Gold.

The dispensary has an established location in Grant Rapids and targeted New Buffalo Township for growth.

"Obviously, it has proximity to Indiana and Illinois as potential markets," Kornoelje said. "Indiana doesn't have recreational cannabis and Illinois is a large market that's dominated by large corporate cannabis with high prices and high taxes. There are 10 million people in the Chicago area to draw from."

So far, Mission Dispensary by the River Oaks Center shopping mall in Calumet City is the only Illinois dispensary to open right by the Indiana border.

"Illinois has more quotas on the licenses and more barriers to entry," Kornoeljesaid. "Essentially, you just need real estate to open up a shop in Michigan. It's two different legal structural frameworks. Illinois has more larger corporations that are more well-funded and well organized. Michigan is more friendly to smaller businesses."

He expects to see strong demand from Indiana and Illinois, especially since New Buffalo already is a tourist destination for those markets.

"New Buffalo is really nice. It's a beautiful beach community that's visited by Chicagoland seasonally," he said. "It's a really nice town apart from being connected to Indiana and Illinois."

The cannabis industry can build on the existing craft beer and wine industries in Southwest Michigan, which also draw people looking unwind and get into a different frame of mind.

"Though cannabis is on the opposite end of the spectrum, it's essentially fulfilling the same need," he said.

He just hopes the market doesn't get so oversaturated that the competition becomes too intense.

"Dispensaries are competitive on price. That's just the nature of retail," he said. "But you pay a lot of money for property and leases and you need to be able to make a return. It's going to get competitive but no one should give pot away for free. That would be shooting yourself in the foot."

All the dispensaries opening should create buzz that will initially draw some more casual or curious customers,Kornoelje said. But over time, the retailers likely will cater to more frequent customers who likely will seek the area out because of all the choice and competition.

"It's not uncommon for people to drive an hour or an hour and a half," he said. "They'll come seeking many locations within a small area. It's like bar hopping but more dispensary hopping. There's also the weekend travelers and weekend warriors. There will be a wide array for everybody."