Michigan cannabis prices are the lowest they have been in years and the industry is suffering. But the combination of an oversupply and ultra low prices has been a win for customers.
Many businesses, especially small and minority owned businesses, are barely making a profit because production costs have increased even as the price for recreational marijuana has fallen.
We spoke with some industry experts about the dynamics at play:
Michigan marijuana stores made over $128 million from recreational use in February 2022. Total sales for marijuana increased, with stores making over $200 million as of February this year, according to a report by the state cannabis regulatory agency.
However, as revenues rose for recreational use, the price of marijuana has plummeted. The average price of an ounce of recreational marijuana was $160.10 in February of last year compared with $86.00 this February.
Experts say one reason the price for marijuana is constantly decreasing is to encourage more consumers to buy it legally, rather than from illegal sellers.
“Even though prices are falling, there’s more people buying in the legal market [and] that’s what’s driving the increase in overall revenue,” said Beau Whitney chief economist for the National Cannabis Industry Association.
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