This article was reprinted by Crain’s Detroit Business.
Michigan marijuana prices stabilised in March, as the sales rebounded from a slump of three months.
A tenth-percentage drop in price was recorded for the average price per ounce of marijuana flowers intended for adult use. This is the most modest decline since 2020. In February, the price dropped 2.2% and the price remains down more than 28% year-over-year.
The sales also improved in March. Michigan Cannabis Regulatory Agency data shows that the state’s legal marijuana industry had sales of $276.95 Million in March, an increase of 14.5% over February.
The adult-use flower category saw the biggest growth in sales, but all categories reported growth. Sales of adult-use marijuana flower increased by 15,000 pounds in March and reached $121.5 millions, an increase of nearly 15% over February.
Not all is good. The sales year-overyear are down as well.
The legal marijuana market in California is still behind last year by almost $26.5 million. This suggests that sales of the state-regulated cannabis market peaked last year at about $3.3 billion.
If the sluggish sales continue, the state is on pace to only reach $2.94 billion in products sold – its lowest total since 2022 and the first year-over-year drop since legal sales began in late 2019.
And product oversupply remains a major problem The inventory of fresh frozen flower – product that is usually grown outside during the summer months, harvested in October and distributed around the year for infused liquids and edibles – remains historically high, driving down prices.
As of March 31, 2018, growers and producers had 1,47 million pounds (or 1.47 kilograms) of frozen fresh marijuana flowers in stock.
The inventory of 353,587.39 pounds, which was in March 2012, is 316% higher than the 1 million pounds fresh frozen that processors and producers had in February.
But the state still issues licenses. In March the CRA granted 35 prequalifications – mostly to growers – along with 9 grower licenses and 7 processor licenses. But only 8 retail licenses were issued.
Meanwhile, the operators of this industry are crumbling under its pressure.
In January, Bay County marijuana operator Pincanna temporarily shuttered 31,500-square-feet of its grow facility and laid off employees to mitigate losses. Chicago-based PharmaCann shuttered its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying off 222, in January. Fluresh closed its 105,000 square-foot, $46-million grow facility in Adrian last November.
Ohio’s legal market – sales began in September last year – is also beginning to cut into Michigan’s market.
Ohio’s adult-use recreation market, which is legalized in Ohio, sold over $242 millions of products during the first four months of last year.