Recently reported cannabis sales in Michigan show a significant increase while inventory remains plentiful and retail prices continue to slide, much to the benefit of consumers. The Michigan Cannabis Regulatory Agency (CRA) reported April 2022 data last week, detailing sales, licensing, and production in the state’s adult use and medical cannabis markets.
April combined adult use and medical market sales skyrocketed to $195 million, up 27.2% from March 2021’s sales of $153.2 million and up 26.9% from April 2021’s combined sales of $153.6 million.
Michigan cannabis prices have turned higher in May, with the spread between indoor and greenhouse flower widening over 50% in April. The increase in April sales might be put down to generally increasing demand – which may be related to significantly lower cannabis prices this year – as well as 4/20 demand. As noted in Cannabis Benchmarks’ April 29 Premium Report, Michigan 4/20 sales included 4,619 pounds of flower, a ten-fold increase from 4/20 holiday sales in 2020 and more than twice the 1,900 pounds of flower sold on 4/20/2021. Michigan cannabis prices may start to stabilize near current levels and even manage a lift going into higher seasonal demand this summer.
April 2022 adult use sales, at $168 million, were up 33.4% from March adult use sales of $121.2 million and up by 59.6% from April 2021 adult use sales of $105.2 million. The April 2022 month-on-month change in sales dwarfs any monthly change in sales previously seen in the Michigan data.
The Cannabis Benchmarks 2021 Annual Chartbook, to be published in the coming weeks, notes a 157% increase in adult use sales from 2020 to 2021, which would be an average increase of just over 13% per month. It appears Michigan demand is continuing to grow; or, perhaps more accurately, latent demand previously served by the illicit market is being increasingly captured by licensed businesses.
April 2022 average daily sales jumped to $5.6 million from $3.9 million in March 2022 even as prices continued to fall, again suggesting surging demand in April.
Pounds of flower sold in the adult use market in April surged 112% after falling 25% in March 2022, itself an unusual downturn given seasonal sales trends typically show a sizable uptick from February to March.
Inventory held by growers that passed the state’s required testing was 62,278 pounds at the end of April. Combined with flower held in inventory at retailers – 52,999 pounds – the amount of immediately marketable flower in Michigan’s adult use market at the end of April was 115,277 pounds, or 2.9 months’ supply based on April sales of 39,747 pounds.
The number of plants harvested and reared in the most recent three months is shown in the table below. Vegetative and flowering plant figures are as of the month-end, while harvested plant figures encompass all those successfully harvested throughout the month. Vegetative, flowering, and harvested plant counts are rising as seasonal demand ramps up.
The average retail flower ounce price fell 30.1% in April 2022, after rising over 19% in March 2022. Flower ounce prices for the most recent three months and extrapolated pound prices are listed below.
The Executive Director of Michigan’s Cannabis Regulatory Agency, Andrew Brisbo, attributed April’s skyrocketing sales to lower prices, a possible migration from the illicit to the legal market, and increased tourism. “With retail prices falling 40% over the last year, the regulated market appears to be growing by pulling consumers from other means of accessing cannabis products,” he said. Brisbo also noted, “Michigan is starting to see a return to tourism, which may be playing a factor in increased sales as well.” Adding to demand, the Ann Arbor Hash Bash, celebrating its 50th anniversary this year, likely contributed to April’s sales spike with an estimated 8,000 to 15,000 attendees, according to local reports.
While Brisbo did not address the drop in medical cannabis sales in the April data, he did say “private sector investment is continuing to favor the larger adult use market in the state.” The CRA chief also spoke to an issue raised by Cannabis Benchmarks regarding the possibility of the separate medical and adult use sectors becoming a single market: “The CRA is still considering ways in which regulatory efficiencies can be realized while ensuring continued patient access as the market continues to shift.” Brisbo continued, “the timing of any policy initiatives through the legislature has not yet been determined,” suggesting there will likely be a legislative mandate to merge the medical and adult use markets.
Cannabis Benchmarks research for our soon to be published 2021 Chartbook shows a 157% surge in Michigan’s adult use cannabis sales from 2020 to 2021 and an 80% surge in combined medical and adult use sales in the same period. In fact, Michigan cannabis sales revenues were the third highest in the nation in 2021, behind the two legacy states of California and Colorado.
Of note, just three of the 10 most populous states – California, Illinois, and Michigan – have fully functioning legal medical and recreational cannabis markets, with Michigan being the tenth most populous state currently. Illinois, the sixth most populous state, saw its 2021 sales tally settle only about $10 million below Michigan’s.