Michigan Market Update
Overall, 2022 was a strong year for Cannabis in the U.S. One interesting observation is that while the more established state markets struggled to grow, newer adult-use markets like Michigan have seen a huge success and expansion. In the month of December, marijuana sales in The Great Lake State hit a record high of over $221 million. That's $9m more than a previous record set in September 2022. Michigan is currently the second-largest cannabis market in the U.S.
Michigan's state cannabis Regulatory Agency (CRA) reported that sales of recreational cannabis reached $208,318,037 in the last month of 2022. In addition, $13,419,377 were made from expenditures on medical marijuana.
The surge in sales happens even though the average cost of marijuana products has dropped by almost half the price. If the cost for an ounce of cannabis in Michigan was around $180 in December 2021, a year later, an ounce cost around $90.
CRA's data also reveals that flower is the most popular cannabis product, followed by vape products and edibles.
Other states like Arizona and Illinois also reported record-high sales of cannabis products in December 2022.
Another noticeable trend is that medical cannabis sales in Michigan are going down while the recreational segment is becoming ever more stronger. This is happening in most states that have fully legalized cannabis in recent years.
Michigan legalized cannabis in 2018. Research firm Headset estimates the value of the Michigan market to be around $2 billion, making it already the second-largest cannabis market in the nation.
Cannabis sales in Michigan grew by almost 30% over the past year, which is probably the strongest market growth of any.
"The U.S. cannabis market as a whole has struggled to grow sales in 2022 after a cannabis boom during the peak years of the pandemic," the state regulators wrote in a report. "However, Michigan, like other newer adult-use markets, has managed to grow. The Great Lakes State has experienced double-digit growth by significant increases across nearly every product category."
And the future for further market growth in Michigan looks bright. Detroit issued its first batch of recreational licenses only a month ago. The launch of legal retail in the state's biggest city will significantly contribute to the goal of growing the market to a $2.5 billion figure by 2025.
In the meantime, state regulators have recommended a $20 million grant for two universities as part of the Veteran Marijuana Research (VMR) Grant Program. That's the second big research funding announced in two years.
The state spends tax revenue from marijuana to localities, public schools, and a transportation fund. In 2022, the state treasury redirected four times more funds to municipalities than it did in 2021.
It has really been a pretty good year for Michigan. And it all looks set to stay that way.
S
Stephen Andrews
