Elevated Exotics expects marijuana market to see growth in Wisconsin

MENOMINEE – A new entrant to Menominee, Michigan’s marijuana scene is biding time until it’s legal to open a store in Wisconsin.

Elevated Exotics, owned by Barbara Niesen and her son Nilsson Davis, opened Feb. 22 at 1012 20th Avenue in Menominee. It also has stores in Escanaba and Republic and plans for a fourth location in New Buffalo in lower Michigan.

With his roots in Oshkosh, Davis said he looks forward to the day when he can open a store there. He estimates the Wisconsin market for marijuana at 1 million smokers.

To those who question when the market for marijuana will be saturated, Davis said it will be years, if ever, before growth is stunted due to a crowded marketplace.

For marijuana entrepreneurs willing to gamble on an undeveloped market for marijuana, plenty of niche locations are available, like the one he opened in Republic, he said.

“I can’t say there’s no room for growth because I’m an example of someone who started very small with under a million dollars in investment and have been offered several million dollars for just one of my stores,” he said.

“You just have to operate properly,” Davis said. When a market reaches a point where “incompetent operators are no longer able to be profitable,” it presents an opportunity for more efficient businesses, he said.

While being first to market can be an advantage, Davis said his Menominee store is better situated than some of the original licensees clustered on U.S. 41. As one indication of its customer volume, Elevated Exotics employs 21 people in Menominee, compared with eight in Escanaba and five in Republic, where the company also grows product.

Success in retail marijuana depends in part on location, and the Elevated Exotics store is closer to the Wisconsin border than many earlier entrants, he said. It has competition from Higher Love and Nirvana, which are just over the bridge from Marinette in the shopping plaza, but his store is next in line for travelers. Farther north are Green Pharm, Lume, The Fire Station, The Quid Shop and Rize.

A store called Puff is expected to open in the former Family Video store, next to the police and fire station and across from Little Caesars Pizza, Davis said. A wildcard is Highwire Farms, which reportedly has the right to purchase the A&B Automotive site at 1015 10th Ave., often called the busiest intersection in the U. P.

The site is controversial because it is where U.S. 41 makes a 90-degree turn. It’s also across the street from the church Menominee City Council member Bill Plemel attends. The church isn’t in favor of the store opening. Plemel said last week he hasn’t heard anything new about marijuana stores but the question comes up at the church.

Others have expressed concern about the 10th and 10th location because it’s around the corner from a senior center and just a couple of blocks from the DAR Boys and Girls Club. It’s across the street from the Northpointe Behavioral Health building and half a block from the Menominee County Courthouse, which is across the street from a probation office.

The Michigan Department of Transportation (DOT) said it worked with the developer and the city to review a preliminary site plan at the location. “To date, MDOT has not received a formal permit application for any work in the MDOT right of way at this site,” DOT spokesman Dan Weingarten said.

These applications have received a lot of attention after a group of five filed lawsuits against the city over the way their applications were scored, and the litigation continued for years.

An election changed the composition of the Menominee City Council, and the new council agreed to modify to the marijuana ordinance.

With questions asked whether the city’s meetings violated Michigan’s Open Meetings Act, the city council reversed course and decided to allow more marijuana stores in.

The city is expected to stop approving new store licenses to avoid having stores too close to one another, Davis said. He added that he heard four more stores are eligible to open before the city imposes the cap at 12 locations.

While the site of the old K-Mart store in the M&M Plaza is vacant and lies within a commercial district zoned for marijuana, it was part of a Brownfield project with tax-incremental financing, so getting approval might require the approval of a separate board. The Menominee County Board of Commissioners, which has representation on the board overseeing the Brownfield project, hasn’t been in favor of marijuana locations within its jurisdiction. Regardless, it received the same amount of revenue from the State of Michigan for permitted marijuana stores operating within the City of Menominee as the city does.

From the 10% marijuana excise tax, the state gives 15% to municipalities with permitted businesses, 15% to counties, 35% to the school aid fund for K-12 education and 35% to the Michigan transportation fund for roads and bridges.

Besides excise taxes, Michigan counties receive about $59,000 per licensed marijuana shop from the state, the same amount as the local municipality receives. They also benefit from higher property values, as competition for sites pushes up the value.

Davis said he became interested in cannabis after his father battled cancer and used cannabis for medical purposes.

“When I was 11 years old, my dad was diagnosed with stage 4 cancer. Around that time, I saw the benefits of cannabis. He beat the stage 4. It came back. He had surgery. It worked, and he survived to around 2020,” Davis said. “Me and him had talked about opening a cannabis business.”

Elevated Exotics’ Menominee store serves customers from Wisconsin, including patients who understand the medical benefits, he said. “I want to bring it closer to their front door with a Wisconsin location,” he added.

It’s only a matter of time before Wisconsin legalizes marijuana sales, Davis said. Whether it forces a shakeout in Menominee is anyone’s guess.

“There will be companies that sell,” Davis said. With more competition, retailers will have to be proactive in their advertising.

“You have to take from places people already go,” he said.

Davis said that other than being instructed to redesign their sign, the city has been fine to work with. He noted that they hold marijuana stores to a higher standard than other businesses.

Asked how the Menominee market might be affected if Wisconsin legalizes retail marijuana sales, Davis isn’t worried. “I think the market is sustainable. Even after it’s legal in Wisconsin, you’re still going to see people coming here because the prices are so cheap.

It’s going to take 10 years minimum of catching up. If the tax structure isn’t proper, it could allow the economy to never catch up, like you’re seeing in downstate Michigan where people from Illinois travel to buy the cannabis for a lower price,” he said.

Elevated Exotics’ Menominee store has customers from Illinois, where marijuana stores are open but apparently more expensive, he said. With plans for New Buffalo, Davis is likely to see Illinois customers as it’s a vacation destination for many Chicago-area residents.