The new sales record, first reported by New Cannabis Ventures, includes $9.8 million in medical marijuana sales and $239.8 million in recreational cannabis sales, for a total of $249.6 million in March, according to data from the Michigan Cannabis Regulatory Agency.
Sales were up by more than 15% from February, New Cannabis Ventures found, and up almost 63% from March 2022.
But the state report also confirmed that wholesale prices have been plummeting, with the average price per pound down more than 54% from a year prior.
With prices on the downslope, Michigan marijuana companies are struggling to turn a profit despite the record sales, Bridge Michigan reported. Retail prices per ounce of cannabis flower in February were down by almost half, to roughly $86 per ounce, from about $160 in February 2022.
According to the Cannabis Regulatory Agency report, Michigan in March had 1,999 active cannabis business licenses, including 656 retailers and 1,005 cultivators.
The number of growers, several sources told Bridge Michigan, is one of the reasons the market is currently oversupplied, which is largely what’s driving prices down.
“There’s way too much supply and so sellers are dropping their price so that they can get on the shelves of the retailers,” Beau Whitney, an economist with the National Cannabis Industry Association, told Bridge Michigan. That’s leaving very little room for profit, he said.
That’s likely to lead to consolidation in the near future, Whitney predicted.
“Those businesses that can’t get enough revenue … to cover their cost, they’re going to go out of business unfortunately,” he said.
“The big multistate operators and big corporations will buy distressed assets and consolidate the market,” Whitney said. “Instead of having hundreds of licenses, there will be substantially less than that.”