Michigan's cannabis market has hit its first annual decline in sales, marking a significant downturn for the state's once-thriving industry. According to recent 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%. This marks the first time since recreational cannabis sales began in Michigan in December 2019 that the market has experienced a year-over-year decrease.
The drop in sales is attributed to 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. This decline has had a ripple effect on the industry as a whole, with many dispensaries and growers struggling to stay afloat.
The Michigan Cannabis Regulatory Agency reported that by the end of 2025, there were 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. This shift is largely attributed to businesses closing due to financial difficulties, with over 940 licenses being inactive in the past six years.
The industry's struggles are further exacerbated by a new tax that was approved in late 2025, imposing a 24% wholesale tax on recreational cannabis. This significant increase in taxation has many fearing that the year ahead will be even more challenging for the struggling industry.
With tens of thousands of jobs at stake, local governments and communities will 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, making this revenue stream an important source of income for many communities.
Despite these challenges, new growers and processors are continuing to emerge, albeit at a slower pace than in previous years. The regulatory landscape is constantly evolving, but it remains to be seen whether the current downturn will lead to long-term changes in Michigan's cannabis market.
The drop in sales is attributed to 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. This decline has had a ripple effect on the industry as a whole, with many dispensaries and growers struggling to stay afloat.
The Michigan Cannabis Regulatory Agency reported that by the end of 2025, there were 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. This shift is largely attributed to businesses closing due to financial difficulties, with over 940 licenses being inactive in the past six years.
The industry's struggles are further exacerbated by a new tax that was approved in late 2025, imposing a 24% wholesale tax on recreational cannabis. This significant increase in taxation has many fearing that the year ahead will be even more challenging for the struggling industry.
With tens of thousands of jobs at stake, local governments and communities will 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, making this revenue stream an important source of income for many communities.
Despite these challenges, new growers and processors are continuing to emerge, albeit at a slower pace than in previous years. The regulatory landscape is constantly evolving, but it remains to be seen whether the current downturn will lead to long-term changes in Michigan's cannabis market.
I'm kinda surprised by this decline in sales. Like, people were raking it in just last year and now they're feeling the pinch? I think this is partly due to over-saturation - there are so many dispensaries popping up everywhere, it's hard for any one shop to really stand out. And yeah, that price drop doesn't help either. But honestly, $58.20 an ounce isn't exactly a bad deal for bud, you know? I mean, some people can get hooked on the stuff and then they're spending even more than they originally were 
. Maybe the industry just needs to find a way to adapt instead of freaking out about it 
is like a microcosm of the challenges our economy faces when regulation gets out of whack 
. The new tax might be a necessary evil to stabilize the industry, but 24% is steep even for the most ardent cannabis advocates 
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just another bubble burst. I think this is what happens when demand isn't as strong as supply. We need to find a balance between growth and sustainability. 
and thats not even 2 mention the new tax lol wut was thot behind puttin in another tax? 
its like did they forget about the whole "recreational cannabis" thing or somethin 
anywys its def sad 2 see ppl losin their jobs & communities losin revenue 
$100 million less in sales? That's a big drop! It's like the whole industry is trying to figure out how to recover from this price bomb 
. I mean, prices are so low now it's crazy, 58 bucks for an ounce of flower? That's almost half what they were just last year 
. And with all these licenses going inactive, it's like some businesses are just giving up 
. But at the same time, new growers and processors are popping up... maybe this is just a correction cycle? 
I'm keeping an eye on this one! #MichiganCannabisMarket #SlowdownSeason #RegulatoryLandscape
- one day you're on top of the world and then BAM! You take a major hit 
. Michigan's sales decline is super worrying, not just for the dispensaries but also for all those people who work in the industry 
. I think the tax hike is a big part of the problem, it's like they're squeezing the life out of them 
. The future looks uncertain for Michigan's cannabis market, fingers crossed it bounces back soon 
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. While this revenue stream is crucial for local governments and communities, it also puts a significant burden on businesses already struggling to stay afloat 
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. But at the same time, I'm curious to see how this all shakes out. Are we gonna get more regulation and stuff? Or is this just a temporary thing that'll blow over eventually 
? Only time will tell!
they're actually losing money lol 3.1% decline in sales is crazy considering how lit the market was just a few years ago 
. It's like the industry knew they were playing with fire 
, but still went ahead and passed that bill.
. If this trend continues, it'll be a disaster for the community too 
, but at what cost? It's like, they're gonna have to adapt to these rising costs and taxes... or get left behind 
i mean, prices are crazy low now, i could almost buy it at the corner store 
... still, with so many licenses being inactive and all, it's gonna be interesting to see how things play out in 2026 
. and yeah, the new tax is a bummer, but thats just politics at play, cant blame the gov for tryin to make some cash 
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... I mean, who doesn't love saving some cash on their weed, right? But seriously though, $100 million less in sales? That's a bummer for everyone involved 
. BUT, on the other hand, I'm all about supporting the community, so seeing all these businesses close up shop because they can't make ends meet? That's just sad