The Michigan Marijuana Regulatory Agency (MRA) recently issued its Monthly Report for June 2020, providing sales, licensing, and production data for the state’s medical and adult-use cannabis markets. After sales boomed in May in both the adult-use and medical sectors of the market, growth was observed to slow in June. On the adult-use side it remained robust, however, while retail revenues largely plateaued in the medical market.
Overall, total adult-use and medical cannabis sales in Michigan in June amounted to over $90.3 million, up by 7% compared to over $84.4 million in combined revenues in May. Monthly medical cannabis sales continued to outpace those in the adult-use sector, but only slightly, with medical cannabis sales accounting for 50.5% of the total in June.
Production in the medical market grew in June, while that in the adult-use sector plateaued. However, growers with equivalent licenses in each market are permitted to transfer product from medical to adult-use inventory, so there is some permeability, unlike in other states such as Colorado.
June 2020 Michigan Medical Cannabis Market Summary
264 medical dispensaries were licensed by the end of June, up from 253 at the end of the previous month. Growth in new stores slowed after 20 new licensees became active in May. Medical cannabis sales expanded for the sixth straight month in June, but leveled off significantly compared to robust growth rates documented in previous months. Similar to the situation in Oregon, it appears that consecutive months of record-breaking sales can only be sustained for so long before demand cools.
The average retail prices of an ounce of flower in Michigan’s medical cannabis system in the most recent three months are as follows:
- April 2020: $259.14 ($4,146 per pound)
- May 2020: $251.46 ($4,023 per pound)
- June 2020: $262.60 ($4,202 per pound)
Average retail flower prices for patients rose in June after three consecutive months of declines. A large influx of caregiver product was reported to have been sold into the state’s licensed medical market in late April, which may be beginning to be depleted. Growers may also be transferring more inventory to their equivalent adult-use licenses as that sector of the market expands.
The number of processors licensed to manufacture concentrates and infused products in Michigan’s medical market rose to 39, from 36 in May. The number of active licenses for the smaller cultivation license tiers – Class A and B growers – ended June at 39 and five, respectively, compared to 33 and four at the conclusion of the prior month. The number of Class C grower licenses rose from 182 in May to 204 in June.
The number of plants harvested in the medical sector of Michigan’s market expanded significantly in June, as did the amount of plants in the vegetative stage, indicating that even larger harvests are in the offing in the coming months.
June 2020 Michigan Adult-Use Cannabis Market Summary
Legal adult-use sales began December 1, 2019 in Michigan, with a handful of retailers authorized to sell to general consumers racking up almost $7 million in sales that month. From January through March, monthly sales figures expanded by between roughly 40% – 50% each month. Sales continued to expand in June, almost surpassing those in the medical side of the market for the first time, but the rate of increase contracted to its smallest figure since the opening of Michigan’s recreational sector.
The mean retail price of an ounce of flower in the state’s recreational sector continued to decline in June, as it has since the market opened. Cannabis Benchmarks® Michigan Spot Index, a composite of both adult-use and medical cannabis prices, rose slightly in June.
- April 2020: $413.33 ($6,613 per pound)
- May 2020: $409.76 ($6,556 per pound)
- June 2020: $400.52 ($6,408 per pound)
The number of active retailer licenses grew to 123 in June, up from 112 in May. Active Class C grower licenses increased to 77, from 60 in May. Seven Class B growers were licensed as of June, up from five the month prior. Production capacity in the adult-use sector plateaued in June, with the number of plants harvested contracting slightly.
A recent report from MLive noted that total production capacity across both adult-use and medical cannabis cultivators was in excess of 500,000 plants as of June, while growers were rearing over 425,000 plants as of May. This suggests that current licensees have some room to expand production capacity, but only so much, and increased supply will also depend on new operations coming online.