Michigan's cannabis market, which was once a driving force for the state's economy, is now facing its first annual decline in sales. The Michigan Cannabis Regulatory Agency (CRA) recently released figures showing that adult-use dispensaries recorded $3.17 billion in sales in 2025, down from $3.27 billion in 2024, representing a decrease 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 decline.
The downturn is attributed to several factors, including a surplus of product and steep declines 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. Dispensaries, growers, and processors across the state are struggling to cope with the oversupply, which has led to reduced prices.
Furthermore, the number of active cannabis licenses has decreased by 85 from the prior year, marking the first year-over-year decrease since adult-use sales began. Over the past six years, approximately 940 cannabis licenses have become inactive due to business closures. This trend is largely driven by the rapid emergence and disappearance of businesses in the industry.
Despite these challenges, new growers and processors are continuing to pop up at a rate that mirrors the closure of existing ones. However, this trend appears to be slowing down, suggesting that the market may soon reach a critical point.
The decline in the cannabis industry has significant implications for consumers, workers, and local governments. The regulated industry currently employs over 41,200 people, with tens of thousands more at risk if the slowdown persists. Local governments also rely heavily on revenue from the excise tax on adult-use cannabis sales, which is shared with municipalities that allow dispensaries to operate.
In a bid to address the struggling industry's financial woes, Governor Gretchen Whitmer recently approved a 24% wholesale tax on recreational cannabis products to fund road repairs. This move has sparked concern among businesses and consumers alike, who are worried that this year may be even worse for the industry.
The liquor industry, which has historically enjoyed significant tax breaks and lobbying power, is notable by its absence from discussions about the cannabis industry's plight. As a result, legislators have largely overlooked the 4% liquor tax since it was established in 1985, highlighting the stark contrast between two industries with significantly different treatment under the law.
As Michigan's cannabis market struggles to find its footing, one thing is clear: the industry's future will be shaped by the complex interplay of factors that contribute to its growth and decline.
The downturn is attributed to several factors, including a surplus of product and steep declines 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. Dispensaries, growers, and processors across the state are struggling to cope with the oversupply, which has led to reduced prices.
Furthermore, the number of active cannabis licenses has decreased by 85 from the prior year, marking the first year-over-year decrease since adult-use sales began. Over the past six years, approximately 940 cannabis licenses have become inactive due to business closures. This trend is largely driven by the rapid emergence and disappearance of businesses in the industry.
Despite these challenges, new growers and processors are continuing to pop up at a rate that mirrors the closure of existing ones. However, this trend appears to be slowing down, suggesting that the market may soon reach a critical point.
The decline in the cannabis industry has significant implications for consumers, workers, and local governments. The regulated industry currently employs over 41,200 people, with tens of thousands more at risk if the slowdown persists. Local governments also rely heavily on revenue from the excise tax on adult-use cannabis sales, which is shared with municipalities that allow dispensaries to operate.
In a bid to address the struggling industry's financial woes, Governor Gretchen Whitmer recently approved a 24% wholesale tax on recreational cannabis products to fund road repairs. This move has sparked concern among businesses and consumers alike, who are worried that this year may be even worse for the industry.
The liquor industry, which has historically enjoyed significant tax breaks and lobbying power, is notable by its absence from discussions about the cannabis industry's plight. As a result, legislators have largely overlooked the 4% liquor tax since it was established in 1985, highlighting the stark contrast between two industries with significantly different treatment under the law.
As Michigan's cannabis market struggles to find its footing, one thing is clear: the industry's future will be shaped by the complex interplay of factors that contribute to its growth and decline.
. A surplus of product and cheap prices = big problems for dispensaries. And now they're just gonna slap a 24% tax on wholesale sales? That's just cruel 
. It's like the government is all "hey, we don't wanna regulate anything" and just throw 'em under the bus when things start to go south. And those business closures? Yeah, that's not surprising at all 
. New businesses are popping up left and right, but only because they're hoping to be the next ones to get shut down 
. It's like a never-ending cycle of chaos in this industry...
they've had a surplus of product and prices have plummeted 
that's gotta be tough for people who are trying to make a living in that space. but at the same time, new growers and processors are popping up so maybe this is just a natural part of the cycle? idk, it feels like they're just trying to find their footing and figure out how to scale without losing too much money 
about michigan's cannabis market declining for the first time ever!!! like what's going on? 
i've been following this industry for ages and it always seemed so fire 
, but now it's facing a huge surplus of product and prices are plummeting 
plus, the fact that the liquor industry is getting away with not being taxed as much is just so whack 
it's like governor whitmer is trying to help or something? 
anyway, i guess we'll just have to wait and see how this all plays out 
[GIF of a stock market chart plummeting]
[Meme of a business in trouble with a giant "X" marked through it]
[Image of a person applying sunscreen, implying a burnt industry]
[GIF of people watching a train wreck from a safe distance]
this is actually happening in michigan, a state that was like super ahead of the game on cannabis. $100 million less in sales? That's crazy 
I don't blame the businesses or consumers who are worried. This could get super ugly if the slowdown persists. The liquor industry gets away with all this favoritism and lobbying, but cannabis? No love 
. and now they're talking about a wholesale tax to fund road repairs? 
that's just gonna put more pressure on the industry. i'm all for supporting our local governments, but come on... can't we find other ways to make some dough 
.
. It'll be interesting to see what happens next in Michigan's cannabis market 
, one minute it's soaring high $3.27 billion in 2024 and now it's crashing down to $3.17 billion in 2025 
. they can't keep up with the demand, and that's causing them to shut down 
️. but on the other hand, new businesses are popping up like mushrooms after rain 
. it's a delicate balance, folks 
.
... i mean, yeah it's facing a decline in sales but come on, $3.17 billion is still way more than what most industries are raking in 
and let's be real, the tax revenue from cannabis sales has been a game-changer for local governments 
️. I'm not sure if this new 24% wholesale tax will even help with road repairs or just end up making things worse for the industry. At this point, I'd say it's anyone's guess what'll happen next 
... it's clear that Michigans government doesn't have a unified vision for these industries or how they should be regulated. Maybe the 24% wholesale tax on recreational cannabis products will help spark some changes? 
anyway, i'm kinda curious to see what happens next - will they raise prices or just try to make the most of the current situation? 
, and local governments relying on cannabis tax revenue 
. The new 24% wholesale tax might not help matters either 
. I just hope they can find a way to rebalance things and get the market back on track 
which might make it harder for people to afford it. What if we're all feeling the pinch?