Recreational Marijuana Prices Continue to Drop in Michigan, Impacting Industry
The average retail price for an ounce of recreational marijuana flower in Michigan has dropped to $65.21, a nearly 30% decrease from February 2024. This decline is part of a larger trend that has seen prices fall since recreational marijuana sales began in Michigan in December 2019.
The Michigan Cannabis Regulatory Agency recently released a monthly report showing that total sales of recreational marijuana products in the state dropped to $241 million in February, down from $247 million in January and $259 million in the same month last year. Despite this decline, the total volume of products sold increased compared to February 2023.
The decrease in prices is having a significant impact on the industry, particularly for growers. “The growers are really struggling right now to recoup the cost of cultivation,” said Robin Schneider, executive director of the Michigan Cannabis Industry Association. “So essentially, they can’t sell it for what it costs to grow it. So I’m anticipating we’re going to see a lot more businesses fail this year. There’s so much product in the system that prices may continue to fall.”
Despite the challenges facing the industry, there are still opportunities for growth. Michigan is the nation’s largest market by units sold, and the state is expanding rapidly, driven by growth in metro Detroit and southwest Michigan. The state also has the highest sales per resident compared to all other states where recreational cannabis is legal, fueled by strong retail access and competitive pricing.
In recent news, a new dispensary, Muha Meds, has opened in Detroit, joining more than 50 cannabis dispensaries operating in the city. Michigan is expected to distribute nearly $100 million in marijuana tax revenue, with each city receiving a portion of the funds.
Overall, the decline in prices is a significant challenge for the marijuana industry in Michigan, but it also presents opportunities for growth and expansion. As the industry continues to evolve, it will be important for businesses to adapt to the changing market and find ways to remain competitive.
