Recreational Marijuana Prices Continue to Fall 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 $91.94 in February 2024. This decline in prices is part of a larger trend that has been ongoing since recreational marijuana sales began in the state in December 2019.
According to the Michigan Cannabis Regulatory Agency’s recent monthly report, total sales of recreational marijuana products in the state also decreased in February, dropping to $241 million. While the total volume of products sold was higher than in February 2023, the sales figure is still down from January’s total of $247 million.
The decline in prices and sales 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. In fact, Michigan has the highest sales per resident compared with all other states where recreational cannabis is legal, with sales totaling $327 per resident.
The state has also seen an increase in the number of retailers and processors, with more businesses opening their doors to meet growing demand. For example, California-based brand Muha Meds recently opened its first dispensary in Michigan in Detroit, joining more than 50 cannabis dispensaries operating in the city.
Overall, while the decline in prices and sales is a challenge for the industry, it also presents opportunities for growth and innovation. As the market continues to evolve, it will be important for businesses to adapt and find ways to thrive in a competitive environment.
