Michigan’s cannabis market hits first annual decline as market shows deeper problems – Detroit Metro Times

For the first time since recreational cannabis sales began in Michigan in December 2019, the state’s legal market saw its first decline in annual sales, according to new figures released by the Michigan Cannabis Regulatory Agency.

Adult-use dispensaries recorded $3.17 billion in sales in 2025, down from $3.27 billion in 2024, a decline of about $100 million, or 3.1%. The drop follows years of growth that helped turn Michigan into one of the nation’s most robust legal cannabis markets.

The downturn comes as dispensaries, growers, and processors across the state continue to struggle with a surplus of product and a steep decline in prices. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier and $95.08 in December 2023, according to the CRA’s monthly reports.

By the end of 2025, Michigan had 2,171 active cannabis licenses, down 85 from the prior year, marking the first year-over-year decrease in active licenses since adult-use sales began. Over the past six years, 940 cannabis licenses are no longer active because the businesses closed, according to the CRA’s licensing data.

Despite the many failures, new growers and processors are popping up almost as fast as others shut down, though that trend is beginning to slow down.  

Cannabis businesses are worried this year will be even worse. In late 2025, Gov. Gretchen Whitmer and the Legislature approved a 24% wholesale tax on the struggling industry to pay for road repairs. No other industry in the state is taxed as heavily as recreational cannabis. Consumers already pay a 10% excise tax and a 6% sales tax. 

Meanwhile, legislators have not touched the 4% liquor tax since it was set in 1985. That may be because the liquor industry has one of the most powerful lobbies and has donated heavily to Whitmer and other lawmakers. 

Tens of thousands of jobs are at stake. The regulated industry is a major employer, with more than 41,200 workers. The workforce includes dispensary employees, cultivation and processing staff, delivery drivers, compliance specialists, security teams, and others.

Local governments could also feel the impact if the slowdown persists. Michigan shares adult-use cannabis excise tax revenue with municipalities that allow dispensaries and microbusinesses to operate, and that money has become an important revenue stream for many communities.

Michigan’s legal marijuana market has generated $13.23 billion in recreational sales since the start of adult-use in 2019, but the state’s latest annual numbers show the industry is on the decline.

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