Michigan is now the top marijuana market in the country — based on per capita spending.
Through the first seven months of the year, Michigan’s marijuana industry sold $1.7 billion worth of product ($58.8 million in medical marijuana and $1.644 billion in recreational), according to data from the Michigan Cannabis Regulatory Agency. Michigan weed is outselling distilled booze in the state and is on track to easily top $3 billion in 2023.
While Michigan won’t top California in overall sales, totaling $5.3 billion in 2022, it beats out the Golden State and other competitors, including the OG in legalization, Colorado, on per capita spending.
Sales in the Rocky Mountain State through June topped $782 million for a per capita spend of $134.03. California is less than $136 per capita. Michigan, however, topped $142.13 in per capita spending on marijuana product in the first half of this year.
Michigan’s success in the marijuana game is correlated directly to the state’s regulatory, tax and overall business framework.
Following the legalization of adult-use recreational marijuana by voters in 2018, Michigan’s framework solidified it into an unlimited licensure state with comparatively low taxes.
The unlimited licensure allowed businesses to get approved to operate grow operations, processing plants and retail stores quickly. Yes, there was and still are problems with local municipality business licensure, but those roadblocks are eroding.
Michigan also taxes consumers among the lowest in the U.S. with a 10% excise tax on recreational marijuana sales. Colorado has a 15% excise tax on wholesale and retail sales. California has a 15% excise tax on wholesale and a per ounce tax on fresh plants and cultivation. Other top players like Washington and Oregon have a 37% excise tax and 17% excise tax on retail, respectively.
It should be noted that Michigan crossed $1 billion in excise and sales tax revenue collected from the marijuana industry last month, the Michigan Department of Treasury confirmed. That’s a number that almost seems unbelievable given the low excise tax.
The low taxes resulted in the Michigan market maturating very quickly due to easy access to marijuana and prices that shrank precipitously — maybe too quickly for some.
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