The Michigan Marijuana Regulatory Agency (MRA) has issued its December 2021 report detailing sales, licensing, and production data in the state’s adult use and medical cannabis programs. The release of December data completes full-year sales tallies for last year.
In 2021, retail sales in Michigan’s adult use market reached over $1.31 billion, up 157% from $510.6 million in sales in that sector of the market in 2020. 2021 medical sales amounted to $481.3 million, up 1.5% from $474 million in 2020. Combined sales in 2021 climbed to over $1.79 billion, up 81.8% year-on-year from $984.6 million in 2020. 2021 is only the second full year of adult use sales in Michigan, which commenced in December 2019.
Michigan’s combined adult use and medical cannabis sales jumped 10% in December 2021, hitting nearly $168 million versus November 2021 sales of $152.7 million. Year-on-year, December 2021 sales were up 66% over December 2020 sales of $101.1 million.
Despite strong growth in demand year-on-year, Michigan’s Spot price remains under significant pressure with new growers coming to market, the first substantial outdoor harvest last fall, and a determination on the part of at least some new growers to undercut the pricing structure to establish their brands.
Year-on-year to mid-January 2022, Michigan’s Spot price is down over 36%. More than half the year-on-year losses have accumulated since late November 2021. Michigan has no cap on the number of grower licenses it can issue so price pressure is likely to increase over time.
Adult use sales have risen in two of the past three months, with holiday demand likely providing the extra bump in sales in December. Given relatively low flower prices, rising sales can be explained by the likelihood that the number of cannabis consumers is expanding due to lower prices, due in part to the wide availability of outdoor flower for the first time, as well as the continued proliferation of retailers.
Average daily sales jumped 8.2% in December, from $4.02 million in November to nearly $4.4 million in December. Outdoor product may be hitting the market at significantly lower price than indoor and greenhouse product and that too is likely pulling in consumers.
Retail flower sales volume jumped 15% in December. Sales revenue jumped in December as well, gaining 11.5% in the month.
Inventory of flower held by growers in the adult use sector that had passed the state’s required testing was at 40,413 pounds at the end of December. Combined with the amount of flower held in inventory at retailers, 38,127 pounds, the amount of immediately marketable flower in Michigan’s adult use market as of the end of December stood at 78,540 pounds, or the equivalent of 3.7 months of supply based on December sales volume.
The number of plants reared and harvested in the most recent three months is shown in the table below. Vegetative and flowering plant figures are as of month-end, while harvested plant figures encompass all those successfully harvested throughout the month of December.
Vegetative plant counts rose 14.9% month-on-month in December and flowering plants leapt by over 46% month-on-month, likely reflecting the work of new growers in the market. Harvested plant count fell by 13.1% in December.
The average retail flower price fell again in December, slipping over $5 per ounce as more growers come into the market and more products at lower price points weighed in. In December, the extrapolated retail pound price fell below the $3,000 barrier, coming in at $2,958 per pound.