Michigan’s Marijuana Industry: Increase In Supply and Decrease In Prices
As Prices Go Down and Supply Goes Up, michigan’s Marijuana Industry Is Going Through Some Growing Pains.
In Michigan, an ounce of flower cost an average of $152 in January 2022. The average price dropped to $80 in January 2023, making what some people call a “consumers’ market.”
Benham Wrigley Jr. said, “When you go in, you can now get more for your money than you could before.”
Wrigley is an attorney at CannaLex law in Grand Rapids, which works in the marijuana business. He said that “oversupply” is one reason why prices have dropped so sharply.
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“You might only find 12 growers in the state of Illinois, but here you can have as many growers as the cities will let you,” Wright said.
One company that is being hurt by this is SKYMINT, which has 24 dispensaries in Michigan. The business had to go into receivership because of money problems.
“SKYMINT made the hard but necessary decision to go into receivership to deal with our debt obligations and financial situation,” the company said in a statement. “This was caused by the problems that many in Michigan’s cannabis industry are facing, such as an excess supply, falling prices, limited access to capital, and rising costs of capital.”
Four other cannabis companies have also been put under receivership, according to a report from Crain’s Detroit Business.
“I think what you end up seeing is that some people took on too much debt. “Some people thought the industry would grow faster than it did,” said Chris Jackson, vice chair of the board of the National Cannabis Industry Association.
Jackson said that even though the marijuana industry is facing problems right now, it still has a bright future.
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“It’s not that consumers care less about choices, because they care about choices. “They want to do things that are safe,” Jackson said. “Our industry as a whole is very young, and just like every other industry, this one needs to be able to fix itself.”
He said that small, locally owned, and unique businesses are the ones that will do well.”Over time, they’ll become important parts of their community, just like any other business,” Jackson said. “I think there’s a lesson in not growing too fast, knowing what you do best, and being as cautious as possible.”
Wrigley told News 8 that he thinks the price of marijuana will stay the same when growers stop making as much and when some stores close.
During the 2022 fiscal year, the Michigan Department of Treasury said that sales of marijuana for adults were worth more than $1.8 billion.