Michigan's cannabis market is on the brink of a crisis as new tax threatens more closures and layoffs. Since recreational sales began in December 2019, prices have plummeted, with over 550 dispensaries and cultivators closing their doors, leaving thousands of employees without jobs.
The latest data from the Michigan Cannabis Regulatory Agency (CRA) shows that adult-use dispensaries generated $3.17 billion in sales in 2025, a decline of about 3.1% from 2024. This marks the first time the recreational market has seen a decline in annual sales.
The downturn is attributed to an oversaturated supply, with many businesses struggling to stay afloat due to declining prices. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier.
Growers are feeling the pressure the most, with 191 out of 430 active grow operations closing since the industry began. This means that about 30.8% of growers have gone out of business over the past six years.
The new tax, which will increase wholesale prices by 24%, is expected to further exacerbate the problem. Many businesses are already struggling to absorb the costs, and some are worried that they will be forced to close or lay off employees.
State lawmakers introduced a bill to limit competition in hopes of reducing oversupply, but smaller cities like Hazel Park, Ferndale, and Inkster would be disproportionately affected. These cities have become cannabis hubs and rely heavily on tax revenue from dispensaries and other businesses.
Cannabis workers are also bracing for the worst, with many employees asking if they will still have a job. Municipal budgets are at risk as well, with local distributions of adult-use excise tax revenue expected to shrink.
The industry is facing a major crisis, and it's unclear how businesses will adapt to the new tax and declining sales. As one business owner said, "We want to have a sustainable Michigan business that gives back to the customers, but with these changes, it will be difficult to navigate these waters."
The wholesale tax is expected to shrink the wholesale market by 14%, according to records obtained by Metro Times. The new tax will also chase away customers and cause a significant decline in excise and sales tax revenue.
As frustration grows over the industry, business owners are worried that more consumers will turn to an illicit market that doesn't face steep tax rates. If that happens, the legal market will continue to shrink, and the state will have less revenue in the future.
The situation is dire, but it's not clear what the future holds for Michigan's cannabis industry. One thing is certain, however: the industry needs significant changes to survive.
The latest data from the Michigan Cannabis Regulatory Agency (CRA) shows that adult-use dispensaries generated $3.17 billion in sales in 2025, a decline of about 3.1% from 2024. This marks the first time the recreational market has seen a decline in annual sales.
The downturn is attributed to an oversaturated supply, with many businesses struggling to stay afloat due to declining prices. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier.
Growers are feeling the pressure the most, with 191 out of 430 active grow operations closing since the industry began. This means that about 30.8% of growers have gone out of business over the past six years.
The new tax, which will increase wholesale prices by 24%, is expected to further exacerbate the problem. Many businesses are already struggling to absorb the costs, and some are worried that they will be forced to close or lay off employees.
State lawmakers introduced a bill to limit competition in hopes of reducing oversupply, but smaller cities like Hazel Park, Ferndale, and Inkster would be disproportionately affected. These cities have become cannabis hubs and rely heavily on tax revenue from dispensaries and other businesses.
Cannabis workers are also bracing for the worst, with many employees asking if they will still have a job. Municipal budgets are at risk as well, with local distributions of adult-use excise tax revenue expected to shrink.
The industry is facing a major crisis, and it's unclear how businesses will adapt to the new tax and declining sales. As one business owner said, "We want to have a sustainable Michigan business that gives back to the customers, but with these changes, it will be difficult to navigate these waters."
The wholesale tax is expected to shrink the wholesale market by 14%, according to records obtained by Metro Times. The new tax will also chase away customers and cause a significant decline in excise and sales tax revenue.
As frustration grows over the industry, business owners are worried that more consumers will turn to an illicit market that doesn't face steep tax rates. If that happens, the legal market will continue to shrink, and the state will have less revenue in the future.
The situation is dire, but it's not clear what the future holds for Michigan's cannabis industry. One thing is certain, however: the industry needs significant changes to survive.
. Who would've thought that a tax hike would be the death of an industry? Like, come on Michigan... how about you try to balance regulation with reality instead of just throwing everything out of whack? 
Those poor business owners are gonna have to shell out 24% more for their stuff now and still manage to stay afloat. I mean, it's not like the whole market isn't already pretty saturated as it is... maybe they should've thought that one through before implementing a new tax 
... like what's gonna happen 2 all these dispensaries & grow ops? They're already on shaky ground with those prices plummeting & now they gotta deal w/ a new tax that'll increase wholesale prices by 24%?! That's just gonna put 'em under even more pressure 
. It's not just about the businesses, tho... our city budgets are in danger, & we don't wanna lose that revenue 
They need some help, you know? The government should introduce a support system or something, like subsidies or financial aid for businesses that are going through tough times 
We need to find a way to make this industry work again, 'cause the thought of all those people losing their jobs is just heartbreaking 
I'm shocked that Michigans cannabis market is struggling so much 
. $3.17 billion in sales last year? That's a big number 
. But at the same time, 550 dispensaries closed and thousands lost their jobs 
. Too many businesses are popping up everywhere, but not enough customers to support them 
. And now they're gonna increase the wholesale tax by 24%? That's just brutal 
.
. Maybe they need to rethink their pricing strategy or find ways to reduce costs 
. Whatever it is, I hope it works soon because this crisis just can't go on forever 
. And then where will we be? 
. The state needs to think about how they're gonna support these businesses and their employees, not just slap on some new tax and expect everything to work out 
. What if they can't even pay their bills? It's a disaster waiting to happen. We need to find a way to help these businesses and workers out 
.
The whole thing is just so messed up. And honestly? I'm not sure if there are gonna be any solutions at all...
. And now the wholesale tax is expected to shrink the market by 14%? That's a huge blow to the industry 
.
. And it's not just about the tax, it's also about the employees who will lose their jobs - that's heartbreaking 
.
to help the industry survive. Maybe they need to rethink their supply chain and pricing strategies 
. But for now, I'm just crossing my fingers that somehow things will work out for Michigan's cannabis market 
. Let's hope for the best! 
. They're already struggling with prices dropping so low it's crazy 
It's just gonna make things worse for people who are already barely scraping by 
️. It's not fair to them, you know? 
some good things are happening though! like there are more researches being done on cannabis and it's getting more accepted as a medicine 
so even though the market is struggling, the industry is still growing in other ways... and hey, maybe this is the push we need to make it more sustainable and regulated 
. I mean, it's not like all dispensaries and cultivators are doomed to fail 
. The state is introducing measures to limit competition, which could help weed out some of the unsustainable businesses 
. And who knows, maybe this will lead to a more efficient market where people can find better deals on cannabis? 
. It's definitely not ideal, but I'm trying to look at it as an opportunity for growth and change 
The tax is going to drive the whole industry into the ground and we're all gonna be paying for it with less revenue 
We need some smart solutions from state lawmakers, not just more tax hikes 
and now its goin downhill fast 
i dont no wut the gov or lawmakers r thinkin but new tax is just icing on cake 
so yeah industry needs major shakeup ASAP 
or else we got some people losin their jobs n it aint gonna end well