Michigan Nears $2B in Annual Sales as America’s Second Biggest Cannabis Market
With the summer season coming to a close, Michigan clocks in total annual cannabis sales thus far at nearly $2 Billion. Every month sees record-breaking figures as the state continues to make cannabis more accessible to a growing number of local communities. However, with these booming sales, there are questions of how long the industry growth will continue and if Michigan can ever claim the number one spot for the largest cannabis market.
In 2022, Michigan had annual cannabis sales of $2.3 Billion. In the first eight months of 2023, the state has just under $2 Billion in sales, with the summer months bringing in the following totals: $254 million sales in July, $270 million sales in June, and $276 million sales in August. At this rate, it’s estimated that Michigan can reach nearly $3 Billion in cannabis sales for the first time since legalizing use in 2018.
According to sales figures provided by Cannabis Business Times, Michigan ranks second for most monthly sales. It only lags behind California, which averages approximately $360 million monthly sales. Although there’s a large margin between Michigan and California sales, the state sits comfortably in the number two position with sales substantially higher than other of the 23 states where marijuana sales are legal.
Here’s the latest sales data for August 2023:
|Rank||State||Cannabis Sales August 2023|
*Estimates based on sales trends for states with unpublished sales data
Michigan’s marijuana sales growth generates hundreds of millions of dollars in tax revenue for the state, with much of it going back into the communities it serves.
New Markets of Cannabis Users and Businesses Driving Sales
There are two main drivers for the growing cannabis sales in Michigan: new demographics of cannabis users and more product accessibility, thanks to licensed businesses.
Walk into any dispensary, and you’ll notice a range of demographics. Legalizing marijuana has opened the doors for more users to seek the products not only to get high but also for its medicinal benefits and as an alternative to consuming alcohol. ClickOnDetroit.com ran a poll earlier this year surveying 1,700 parents about their cannabis use, and 62% responded affirmatively, ranging from frequent to rare use.
The stigma about using marijuana is becoming taboo as the state becomes more open to the plant. For example, dispensaries are permitted to use mailers for marketing, large billboards around town, and events like the Cannabis Cup drawing large crowds of users.
Many of the cannabis sales are attributed to recreational sales. This is the first year we’re seeing the effects of recreational weed sold in a major market like Detroit and other communities soon to follow, including Pontiac and Waterford. And it’s not just Michigan residents benefiting from recreational sales—Ohio and Wisconsin residents frequently cross the border to bring business to our dispensaries.
Michigan has been proactive in its marijuana licensing, creating opportunities for new businesses to operate in the growing industry. For comparison, in 2021, less than 350 cultivator licenses were granted in the state. Today, there are more than 850 licenses. In addition, Michigan is currently issuing recreational licenses in three stages. It just concluded the second phase to bring a host of new operators to the industry by 2024.
Uncapped Growth Unlikely for the Marijuana Mitten
Even with skyrocketing sales, industry experts have reservations about how long the growth will continue and the implications of such rapid growth in the state.
Many are doubtful that Michigan marijuana sales will ever surpass that of California due to the sheer market size—40 million population in California vs. 10 million population in Michigan. Also, business from Ohio can soon be reduced significantly since it can potentially become a legalized state in the November elections.
Supply far outpaces the demand for cannabis in Michigan. As more licensees of cultivators and dispensaries become active, we’re seeing a drastic decline in price for cannabis products statewide. Many green entrepreneurs are still eying the dream of a Green Rush; however, only the most business savvy can survive in this highly competitive market. Several businesses close their doors shortly after opening, as well as business consolidations.
Keys to Future Sales Growth
Michigan is still on track to continue breaking new sales records in the upcoming months. There are still large communities where recreational sales aren’t legal, and the introduction of new cannabis products continues to attract new users.