Detroit Free Press: Jeff Stoltman on the prospects of the marijuana business for entrepreneurs
With medical marijuana dispensaries showing up in many locations and Michigan voting on legalizing recreational pot this fall, a lot of entrepreneurs are lining up for what looms as the next business gold rush. Jeff Stoltman, professor of marketing and entrepreneurship at Wayne State University's Mike Ilitch School of Business, said a lot of his students look at opening a marijuana business as a sure thing. Stoltman said he pushes his students who are interested in the pot business to dig deeper into market realities. "They’re looking at this tremendous explosive growth in the states where the cannabis business was liberated a little earlier and there is this ‘Why not here, why not me?’ They don’t dig too deep to find out who is really benefiting the most of those kind of operations and what was the path that they took and can they replicate that here. You’re going to see a period of rapid expansion, there will be winners and losers," Stoltman said of Michigan's pot entrepreneurs. "That market map, that competitive landscape will look very crowded very quickly. And just the economics of it will mean that some of them will survive and many of them will not." Stoltman suggested that franchised operations may be another model that will flourish in the emerging growth industry. That may include investors from Colorado and California, two states that loosened their pot rules earlier than Michigan. "Franchising looks like the way it almost always goes when we’re talking about a business of this type," Stoltman said. "And my money would probably be on the businesses that are establishing a really good footing and great operational systems and cost efficiencies out in Colorado and California." And he added, "It’s going to be hard for a mom-and-pop head shop to make its way through that market space."