Michigan Cannabis Market Keeps Breaking Its Own Sales Records

Despite the record sales, cannabis companies are struggling to turn a profit.

The Michigan marijuana market continued to break records in March, hitting a new sales high of almost $250 million for the month, after selling $2.3 billion in 2022.

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.”

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

One comment

  • Alan Brochstein

    April 13, 2023 at 6:47 pm

    John, you are a great journalist and a good person too. Thanks for linking us!


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