Wholesale marijuana flower prices in Michigan have leveled off and ticked upward in recent months, offering cause for cautious optimism among producers who suffered as prices plummeted during the past few years.
Michigan is a key state market for legal marijuana, projected to rank second only to California this year in terms of annual recreational and medical cannabis sales.
If some players are “bringing in product that is not legal, not compliant, and selling it for pennies, essentially, it really has this really rough effect on the market, on pricing, (on) everything from flower to distillate,” said Narmin Jarrous, chief development officer at Livonia, Michigan-based vertically integrated cannabis company Exclusive Brands.
However, other factors are expected to continue putting downward pressure on prices: Michigan’s marijuana market remains home to significant outdoor production during the warmer months.
Also, Michigan has no statewide cap on the number of cannabis business licenses, making it uncertain whether the wholesale price stabilization will last.
Michigan’s adult-use market launched in December 2019, and in the early days, a pound of cannabis flower commanded an impressive premium propped up by tight supply and growing demand.
At the pinnacle of wholesale prices in February 2020, the average price per pound of flower was $3,883, according to sales data provided by New York-based cannabis wholesale platform LeafLink.
Michigan wholesale prices have yet to return to such lofty heights.
By February 2021, the average per-pound price for flower had crashed by 61% to roughly $1,510, LeafLink’s data shows.
Prices fell another 29% to $1,075 by February 2022, then slipped 27% year-over-year to $789 by February 2023.
For now, flower prices are on the upswing: The average per-pound wholesale price grew to $832 in April, $907 in May and $963 in June.
Still, memories of rock-bottom prices left a lasting impression on Michigan cannabis producers such as Rebecca Colett, CEO of Detroit-based cultivator and processor Calyxeum.
“Many cultivators were consolidating and closing, there was just so much surplus of weed on the market that cultivators were selling for $500 a pound, even $400 a pound – very crazy prices,” Colett said.
“And a lot of people couldn’t keep up.”
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