While medical cannabis became legal in Michigan in 2008, it was not until 2018 that the state began to license and regulate such businesses; sales out of officially sanctioned medical dispensaries only began in October 2018. A little over a year later, adult use cannabis sales commenced in December 2019, as indicated in the following charts by the vertical dotted line. Until March 2021, only medical cannabis businesses in good standing were eligible to obtain most types of adult use cannabis business licenses, after which time those licenses were open to all applicants.
Similar to Colorado, the medical and adult use cannabis supply chains in Michigan are separate. However, some allowances were made for businesses to transfer plants and product from the medical to the adult use sector. Additionally, registered caregivers – small-scale, mostly unregulated growers and product manufacturers – were allowed to sell flower and other products into the regulated market from the beginning of licensed medical sales in 2018 into 2020. Caregiver sales began to be phased out in March 2020 and were eliminated entirely by September 2020. Wholesale price data from prior to October 2018 – which can be found in the chart below, in the following page – consists of reported transactions between caregivers and dispensaries, which existed prior to that point but operated without state licenses.
Michigan medical cannabis sales volumes had been trending downward leading up to the beginning of adult use sales. They spiked shortly after, from spring into the summer of 2020, though this appears to be due more to event-driven demand (the coronavirus pandemic), rather than any factors related to market development. Medical sales volume declined in the second half of 2020, with supply constraints from the phasing out of caregiver product likely playing a role. As more cultivators came online and supply increased, so did sales volumes. While there has been month-to-month movement, the overall trend has been relatively steady from the second half of 2021 to the present.
Cannabis Benchmarks data shows wholesale medical cannabis flower prices rose sharply following the beginning of adult use sales. This movement reversed quickly, however, and prices tracked downward through Q1 2020, but then resumed an uptrend with the phasing out of caregiver product, along with elevated pandemic demand.
The current downtrend in price that began in Q3 2021 is due primarily to more cultivators entering the market – remember that adult use licenses became available to all applicants in March 2021 – and scaling up operations, as well as the state’s first sizable outdoor harvest occurring in Q4 2021.