The year continues to get worse for Michigan’s marijuana growers as prices remain in free fall.
Prices for adult-use marijuana prices dropped another 3% in November to $71.80 for a pound of flower, down nearly 23% from the start of the year, according to data from the Michigan Cannabis Regulatory Agency.
That’s the all-time record-low price since the state legalized recreational marijuana in 2018.
The price slide has made it all but impossible for several growers in the state to turn a profit: prices have fallen 87% since legalization in 2018.
Chicago-based PharmaCann told employees earlier this month it would shutter its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying off 222 by the end of January.
And Fluresh LLC, doing business as Tend.Harvest.Cultivate. announced in November it was closing down its $46 million, 105,000-square-foot grow facility in Adrian.
“It cost me more to grow in Adrian than I could sell on the market,” CEO Brandon Kanitz told Crain’s. “The site is not profitable.”
Fluresh and PharmaCann’s LivWell are victims to the state’s low prices, which are a consequence of market oversupply.
Experts predict more closures in the coming months.
But the low prices have created a buyers’ market for consumers.
The industry sold $276.4 million worth of cannabis in November, up nearly 3% from October.
Infused edibles (gummies, suckers, etc.) remain the state’s largest sales category, selling 435,456 pounds in November, up from 397,462 pounds in October.
The state has averaged nearly $275 million in monthly weed sales and is on pace to sell $3.3 billion worth of marijuana in 2024, up from $3.06 billion in 2023. The state’s weed industry is now larger than the market cap of several of the state’s largest companies, including Visteon Corp. Neogen Corp., and La-Z-Boy, and more than twice the size of the market cap of W.K. Kellogg Co.
It’s unclear whether prices will stabilize in the coming year or how many other growers and processors will shutter with the prices as they are now.
Dustin Walsh is a senior reporter for Crain’s Detroit Business, covering health care with a focus on industry change and operations, as well as the state’s emerging cannabis industry. He is also a regular columnist on all things health, labor, economics and more.
