Michigan’s Marijuana Market: Sales Up, Revenue Down

Why Is Revenue Falling Despite Soaring Sales in Michigan’s Marijuana Market?

Listen: Michigan’s Sales Fall

Summary

• Despite increased sales, Michigan’s marijuana market saw a decrease in revenue.
• The decrease in revenue can be attributed to falling cannabis prices, with the average price per ounce dropping from $90.70 to $86.

Despite selling more cannabis in April than in March, Michigan’s marijuana retailers saw a dip in revenue. The latest data from the Michigan Cannabis Regulatory Agency (CRA) reveals an interesting trend in the state’s burgeoning marijuana market.

April Sales Overview

In April, Michigan retailers sold a total of 573,206 pounds of cannabis—a 9.3% increase from March. This included 569,620 pounds to adult-use customers and 3,586 pounds to medical marijuana patients. However, the total revenue for April amounted to $278,546,444, representing a 3.5% decrease from the previous month’s $288,843,279.

Breakdown of Sales

• Recreational Sales: Adult-use customers spent $276,685,183 in April, down from $286,790,258 in March.
• Medical Sales: Medical marijuana sales also saw a decline, with $1,861,261 spent in April compared to $2,053,021 in March.

Price Trends

The downward trend in revenue can be attributed to falling cannabis prices. The average price for an ounce of recreational cannabis dropped from $90.70 in March to $86.61 in April. Similarly, the average price for an ounce of medical cannabis decreased from $101.22 to $99.74 during the same period.

Growing Interest in Cultivation

Interestingly, despite the lower retail prices, the state continues to see a surge in applications for Class C cultivation licenses, which allow for up to 2,000 cannabis plants per facility. In April, nearly all new medical marijuana business applications (335 out of 336) were for Class C grow licenses. On the recreational side, 30 of the 117 new business applications sought Class C cultivation permits.

The Bigger Picture

The fluctuating dynamics of Michigan’s marijuana market highlight the challenges and opportunities within this rapidly evolving industry. While lower prices may benefit consumers, they pose a challenge for retailers aiming to maintain or grow their revenue. However, the steady interest in cultivation licenses indicates ongoing optimism and investment in the sector.

As the market continues to mature, stakeholders will need to adapt to these shifts to sustain growth and profitability. For now, Michigan’s marijuana industry remains a fascinating case study in the complexities of legal cannabis markets.