While Michigan has undergone a price rout in 2021, with wholesale flower prices falling nearly $500 per pound, the state is virtually guaranteed to attract business from neighboring Ohio where medical cannabis is legal, but prices are significantly higher. Under Michigan law, licensed dispensaries are permitted to sell to registered patients from other states with legal medical cannabis.
Historical data from the Ohio Medical Marijuana Control Program indicates that, as of the end of September, a tenth of an ounce of plant material (flower) cost $28.81 or $288.10 per ounce, equivalent to an average retail price for patients of $4,610 per pound. In September in Michigan, as we covered above, the average retail price for flower in the medical cannabis sector was $3,065 per pound, about a third lower than what patients are paying in Ohio. With price differentials at this level, prices falling in Michigan, and Ohio patients upset about local pricing, Ohio patients traveling to Michigan to purchase is bound to occur until Ohio medical cannabis prices come down.
Ohio’s medical market opened in January 2019 but prices have not fallen appreciatively. A report from the The Dayton Daily News quotes the CEO of an Ohio dispensary as stating, “Everybody’s selling pretty much at the same price, all of the locations. There’s no price-gouging by any individual owners.” However, the report notes she continued, saying there is also an understanding among owners to not undersell it “just so they can get all the sales.” The seller further opined, “that happens in other industries, but I think there’s a respect among all of the owners to sell for what the going rate is.” State officials have promised to address medical market issues, but their efforts have had virtually no effect on prices according to the historical data provided by the Ohio Department of Commerce.
The number one patient complaint in Ohio is the price of medical cannabis, as documented in a recent Ohio State report. With Michigan prices under pressure due to the proliferation of cannabis licenses and expanding production, some Ohioans will almost certainly continue to cross the border seeking a less expensive alternative.