Michigan's Cannabis Glut Pushes Prices Down To Historic Lows, More Supply Than Demand

Retail cannabis sales in Michigan expanded 27.5% in 2022 reaching $2 billion, however, sales did not translate automatically into higher margins for cannabis companies.

In part because the average retail cost for an ounce of marijuana has dropped to record lows ranging between $95 and $60 an ounce. The average retail price in Michigan plummeted by 50% in 2022.

MLive reported as of November, there were more than 591 retail businesses in the State, “meaning there’s a cannabis store for nearly every 17,000 Michigan residents,” but these businesses are clustered only in those communities that have not banned recreational commercial sales.

In addition to the price drop and the coagulated market, there is also a spike in cannabis market offer. There were 1,673 grow licenses issued.

“There’s been more product grown than what the consumers can reasonably consume or that the retailers are able to sell,” said Robin Schneider, director of the Michigan Cannabis Industry Association.

“A number of businesses will likely sell, go out of business, and we’ll see more mergers and acquisitions as businesses attempt to combine resources and stay afloat,” added Schneider. “It’s really turning into a scenario where the best brands will win, and the consumers are dictating the winners and losers.”

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Photo by Jeff W on Unsplash.