Decline In Michigan Marijuana Sales Affecting Small Growers, Here's What They Say

Michigan Cannabis Sales Declines 1% Sequentially in August

A new report from the Michigan Marijuana Regulatory Agency showed that the state's cannabis sales "slipped 1% compared to July and increased 26% year-over-year to $207.9 million in August."

The agency, which broke down sales by medical and adult use, stated in its report that "with medical sales falling 53.9% from a year ago to $18.5 million, down 12.4% sequentially, and adult-use sales expanding 50.9% year-over-year to a record $189.4 million, up 0.3% sequentially."

According to New Cannabis Ventures, Michigan “breaks out sales by category and provides pricing detail by category, for both medical and recreational use.”

Image by New Cannabis Ventures

Additionally, as supply continues to expand, recreational cannabis pricing has seen a 'dramatic' decline. In August, the average price of $1869 per pound fell 3.9% sequentially and fell 47.5% from a year ago. "Michigan cannabis sales expanded 82.1% in 2021 to $1.79 billion and are up 26.1% thus far in 2022 at $1.45 billion," concluded the report.

Michigan marijuana grows and small growers ask to slow big cannabis operators

Due to falling marijuana prices in Michigan, small growers who joined the state's young and volatile market are now, being consumed by large corporate firms in a "race to the bottom," reported MLive.

Recently, at a Cannabis Regulatory Agency (CRA) quarterly public meeting held in Lansing, some commenters who identified as small players in the 3-year recreational market and called on regulators to stop issuing new cultivation licenses, at least temporarily. They also want to limit the number of plants any company can grow to 10,000. Several called for better enforcement to prevent marijuana from entering the illicit market.

Kristsa Beller, who operates Real Leaf Solutions, a 2,000-plant grow in Kalkaska, said a moratorium on new grow licenses would push back against the “capitalism gone wild” that has “ravaged other states” and protect communities from the “poverty and decay that is left in the wake of speculators.”

According to outgoing CRA Director Andrew Brisbo, over the past year, "adult-use marijuana flower prices have fallen 47%, while recreational marijuana sales have risen 126%," which indicates further market saturation.

“It’s a race to the bottom,” said George Lynch, who identified himself as the owner of Simplicity farms, a “very small” locally owned family grow. “There’s no end to it that we can see. It looks like it’s just going to get cheaper and cheaper and more and more flower every day ... We are very much in support of a moratorium on new grow licenses and excess grow licenses.”

Michigan has issued marijuana cultivation licenses capable of producing nearly 1.7 million plants at any given time. However, such excess would not benefit small businesses, who complained during the quarterly meeting.

The competing Michigan Cannabis Manufacturers Association (MCMA), a large grower in the state and chaired by former Licensing and Regulatory Affairs Director Shelly Edgerton, said it is “open to discussion of a grow license moratorium,” but wants a focus on eliminating unlicensed marijuana in the system.

Edgerton said in a statement issued by the MCMA following Wednesday’s meeting, that “illicit sales remain the main way Michiganders get their cannabis” and ”there is also a growing number of licensed cannabis operators providing an illicit or untested product.”

“We can help address these two pressing issues by cracking down on the illicit market and ramping up enforcement statewide,” he concluded.

Photo: Courtesy of Ryan Lange On Unsplash