YPSILANTI, Mich. (WXYZ) — It’s been more than four years since Michigan voters chose to legalize recreational marijuana in our state.
Since then, local communities haven’t always agreed.
Just this November more than two dozen marijuana-related proposals were on the ballot at the local level, either in support of or against allowing recreational marijuana businesses to operate.
Several of those measures were in metro Detroit, including in Addison Township and Brandon Township in Oakland County where voters decided against allowing recreational cannabis establishments. Voters in the City of Auburn Hills approved an adult-use marijuana business proposal.
In Macomb County, Chesterfield Township voters also came down in favor of a proposal to allow for recreational marijuana establishments.
So where does the industry stand, more than four years in, as we head into 2023?
In short - it’s a great time to be a pot smoker and a challenging time to be on the retail side in Michigan.
“Let’s just say I could come in to this dispensary now and buy an eighth every time,” said Yahna Fargo, a cannabis consumer and regular customer at the newly-opened Planet Jane dispensary in Ypsilanti.
She’s been buying cannabis from Michigan’s recreational market for about a year now, and has been coming to Planet Jane since it opened four months ago.
With loyalty points and special promotions, Fargo is getting more for her money right now.
“Then they’ve got 20 percent off days,” she said, stopping in to buy some product Wednesday afternoon.
It’s no surprise that consumers are loving this price drive. For business owners, it’s more complicated.
“You have to come down on your price or else you won’t survive,” one of Planet Jane’s owners Moe Kasham told Action News.
Planet Jane has a unique license which requires them to only sell the flower they grow on site. However they also purchase infused produced like edibles and pre-rolls from outside vendors to sell.
As for the flower prices, Kasham said they’re bound by the market around them.
“The prices have gone down pretty significantly over the past couple of months so we’re noticing that and we’re pricing our flower and products accordingly,” he said.
According to state reports from Michigan’s Marijuana Regulatory Agency, in October 2020 the average retail price for an ounce of marijuana flower was around $288 dollars. A year later, consumers were paying under $200. By October of 2022, the price was down to $109.
We asked an industry expert why prices are plummeting.
“It’s really supply and demand,” said Harry Barash, vice president and cannabis industry specialist at NAI Farman, a real estate firm in Southfield.
“With the oversupply of product right now it’s really hard to sell,” he said.
Kasham said his dispensary’s unique model has allowed them to avoid the oversupply of flower problem, since they grow in small batches. But they’re still needing to drop their prices, which isn’t ideal.
“Until something changes dramatically, we’re going to have the same problem that we’re having now,” Kasham told Action News.
Both Kasham and Barash point to Michigan’s lack of a license cap in our state; due to a high number of growers, the market has been flooded with product even as more municipalities vote to allow businesses to open up shop and more retailers come online.
Barash said this challenge has happened in other states too like Colorado, and the market eventually course corrected. One silver lining to this, is that the black market is likely getting smaller he said, because it’s harder to compete price-wise.
Michigan’s cannabis market could one day look similar to other industries, like liquor, Barash said.
“70 percent of the product is bottom shelf. And that’s really what most consumers are looking for. They’re looking for the cheapest price at the highest THC,” he told Action News.
There is still room for money to be made, Barash said.
“However the business model has changed drastically over the last 18 months. Where it was at a point where it should have really never been before, Where the average price of flower was going for almost 300 dollars an ounce,” he said.
As consumers rejoice, Barash said retailers will just need to be patient while trying to get themselves apart.
“There’s definitely going to continue to be a correction. I think it might get worse before it gets better,” he told Action News.
