Michigan cannabis sales plunge 11.3% month over month

Michigan cannabis sales are plummeting.

The state’s medical and recreational sales of $251.3 million were down 11.3% in September compared to the previous month, according to the Michigan Cannabis Regulatory Agency.

That’s the largest monthly change in sales since a 13.25% decline from December 2023 to January 2024.

Medical sales in Michigan plunged 60.6% to $403,124 compared to last September, and adult-use sales declined 5.6% to $250.9 million.

But prices for marijuana flower rose 2.2% to $63.16 in September compared to $61.79 in August.

The drop in sales comes after Michigan imposed a 24% tax on wholesale marijuana as part of the $84 billion state budget Gov. Gretchen Whitmer signed into law last week.

The tax is expected to generate $420 million per year to put toward the state’s $3.9 billion annual road funding shortfall. Last year, the tax contributed nearly $116 million to road funding.

Michigan’s leading cannabis trade group, the Michigan Cannabis Industry Association, is challenging the tax, scheduled to take effect on Jan. 1.

Michigan’s $3.2 billion annual cannabis market is the second largest in the U.S., trailing only California.

Operators argue that the market is saturated with businesses and supply and warn that a significant tax hike could further destabilize the industry.

Michigan voters approved the recreational use of marijuana through a 2018 ballot initiative. Adult-use sales began in December 2019.

Under the state constitution, amendments to a voter-initiated law must either be approved by a public vote or pass with a three-quarter supermajority of both the state House and Senate.