Michigan Cannabis Sales Fall, But Consumers Are Buying More at Dispensaries

Adult-use cannabis sales totals in Michigan declined for a fourth
consecutive month in May, according to state Cannabis Regulatory Agency
(CRA) data outlined by the Detroit Metro Times. Between January and May,
adult-use dispensaries in the state sold $1.31 billion worth of products,
down from $1.34 billion from the same period last year.

It marks the Michigan cannabis industry’s first year-over-year decline
since adult-use sales began in the state in December 2019.

The downturn is likely caused by oversupply – state data shows that
dispensaries held more than 160,000 pounds of flower in April, up from
143,300 pounds the prior year – which is leading to lower prices for
consumers. In May, the average price of an ounce of flower was $63,
compared to $88 a year prior. When adult-use sales began in 2019, the
average price for an ounce of flower was more than $500.

In turn, consumers are buying more product at dispensaries. In May,
retailers sold about 20% more flower, concentrates, vape cartridges, kief,
edibles, and shake, despite reporting lower sales totals.

In April, state lawmakers held a hearing about whether to impose a
moratorium on new cannabis cultivators, during which Brian Hanna, director
of the CRA, told the panel that without changes, the industry is “going to
see consolidation.”

“You’re going to see small businesses going out of business. You’re going
to see bigger buying out smaller,” she said, according to a Metro Times
report. “You’re going to see lesser variety. You’re going to see social
equity businesses suffer along with those businesses.”

However, under current state law, the CRA is required to issue licenses to
applicants that meet the criteria, and lawmakers have not passed any
moratorium.