Pincanna has temporarily shuttered part of its grow facility and laid off employees in the wake of collapsing cannabis prices.
“The oversupply of cannabis in Michigan has created a highly-competitive and unsustainable market,” Rob Nusbaum, founder and owner of the Pinconning-based operator, said in a statement to Crain’s. “Large-scale cultivators, including our greenhouse operations, have left financial strain.”
Roughly 31,500 square feet of greenhouse grow is now offline in the company’s Pinconning cultivation facility, which totals 135,000 square feet. The greenhouse marijuana was primarily sold to third-party processors or retailers, Nusbaum said.
Nusbaum declined to reveal how many employees were laid off in the rollback of its greenhouse grow.
The company plans to restart the greenhouse operations “as the Michigan cannabis market normalizes,” Nusbaum said.
Greenhouse grows utilize natural light and are viewed as producing slightly higher quality marijuana than plants grown outdoors. Yet the product is slightly lower in quality than light-controlled indoor operations, and businesses struggle to find a market for it as prices are undercut by the inexpensive outdoor-grown cannabis.
Rob Nusbaum, founding partner, poses for a portrait at Pincanna in Pinconning, Mich. on June 18, 2024.
The remainder of Pincanna’s cultivation is operational as well as its five retail stores in Pinconning, Mt. Pleasant, Kalamazoo, Kalkaska and East Lansing, Nusbaum said.
“Pincanna’s retail and processing operations (the production of carts, pre-rolls, infused pre-rolls, rubs, etc.) are central to the company’s strategy going forward …,” Nusbaum wrote. “The company will also continue to grow premium flower for its own stores and for select retailers within our state-of-the-art indoor grow facilities.”
Pincanna’s greenhouse operations are another latest casualty in Michigan’s legal marijuana industry as prices continue to fall, smothering margins.
Adult-use marijuana prices plummeted nearly 26% between the start and end of the year to an average of just $69.20 for an ounce of adult-use marijuana flower in December.
Two major cultivators have recently announced closures.
Chicago-based PharmaCann told employees it would shutter its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying off 222, in January.
Fluresh LLC, doing business as Tend.Harvest.Cultivate, announced it was closing down its $46 million, 105,000-square-foot grow facility in Adrian at the end of November.