As surrounding states continue to lag behind on the reform front, Michigan’s cannabis market has grown to powerhouse status with nearly $2.3 billion in sales for 2022, according to the state’s Cannabis Regulatory Agency (CRA).
That massive retail haul—which also includes medical sales—came during Michigan’s third full year of a commercial adult-use program and represents 28% growth over 2021 sales. Behind that growth, Michigan is now the nation’s second largest cannabis market, passing the likes of Massachusetts, Illinois and Colorado.
Only California, which is on pace to eclipse $5 billion in sales for 2022 based on third-quarter figures, has a bigger market when it comes to retail dollars. But unlike many of the legacy markets, Michigan remained in a growth phase last year.
“Michigan, for example, is the growth leader in 2022, and, as a state, it is still growing to meet the demand in a rec market that is  years old,” Headset analysts Cooper Ashley and Mitchell Laferla recently told Cannabis Business Times.
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Michigan’s annual surge was headlined by a record $221.7 million in sales in December 2022, with more than $208 million coming from adult-use dispensaries (good for 94% of the overall market), according to CRA.
While overall figures are up, medical cannabis sales declined nearly 47% from 2021. That shrinking market segment is tied to falling retail prices: Fewer caregivers are growing their own cannabis because doing so no longer saves money for their patients, Rick Thompson, owner of the Michigan Cannabis Business Development Group and executive director for Michigan NORML, recently told CBT.
Michigan’s medical cannabis program lost 9,222 primary caregivers and 57,878 qualified patients in 2022, according to CRA.
Those numbers dwindled as the average flower price per ounce at adult-use retail fell more than $94—from $185 at the end of 2021 to an all-time low of $91 in December 2022.
But the recurring story for Michigan dispensaries has been an uptick in demand outpacing the falling prices. Specifically, the state’s adult-use retailers sold 68,432 pounds of flower in December 2022, more than tripling the amount sold the previous December, according to CRA.
Overall, Michigan’s licensed operators sold nearly 523,000 pounds of adult-use flower in 2022, representing a 181% year-over-year increase. Here’s a snapshot of the inverse relationship between flower prices and pounds sold (for the adult-use market):
|2022||Flower Price||Pounds Sold||2021||Flower Price||Pounds Sold|
As demand has increased, so has supply. Michigan licensees harvested more than 3.5 million plants in 2022 (for both adult-use and medical markets), representing a 70% increase from the nearly 2.1 million plants harvested in 2021, according to CRA.
And flower still remains king.
In December 2022, flower sales accounted for 47.7% of Michigan’s adult-use market, while vape cartridges (19.6%), concentrates (12.4%), infused edibles (11.8%) and shake/trim (7.8%) were the other leading product categories, according to CRA.
As of Dec. 31, the state’s adult-use inventory stood at roughly 416,000 pounds of flower, including 109,800 pounds at grow sites, 75,800 pounds at retail facilities, 88,300 pounds at processors, and 142,100 pounds of fresh frozen flower at processors, according to CRA.