Michigan's cannabis market is experiencing a decline in sales, with the industry struggling to stay afloat due to an oversaturated supply and increasing competition. Since recreational cannabis sales began in December 2019, prices have plummeted, resulting in over 550 dispensaries and cultivators closing their doors. Thousands of employees have also been laid off as a result.
The latest figures show that the recreational market saw a decline in annual sales, with adult-use dispensaries ringing up $3.17 billion in sales in 2025, down from $3.27 billion in 2024. This represents a decline of about $100 million, or 3.1%. The decline is attributed to an increase in wholesale taxes, which are expected to continue to impact the industry this year.
The Michigan Cannabis Regulatory Agency (CRA) has approved a new tax rate of 24% on cannabis products, which is expected to further reduce sales and force more businesses to close. The tax will be applied at the wholesale level, meaning that growers and processors will be responsible for paying it upfront, before passing it on to dispensaries.
Industry experts say that the tax will have a devastating impact on small businesses, particularly those in smaller cities like Hazel Park, Ferndale, and Inkster. These cities rely heavily on cannabis sales to generate revenue, but with the new tax rate, they may struggle to maintain their current levels of revenue.
Growers are feeling the pressure the most, with many already struggling to stay afloat due to decreasing prices and increasing competition. The state's regulated cannabis industry has experienced significant growth since legalization, but fluctuations in supply and demand are now causing concern.
The new tax rate is expected to lead to further closures and layoffs, as well as a decline in excise and sales taxes for local governments. Municipal budgets that rely heavily on cannabis tax revenue will also be impacted.
Business owners say that the industry is facing a "perfect storm" of challenges, including oversupply, increasing competition, and high wholesale taxes. They fear that more consumers will turn to an illicit market, which does not face steep tax rates, further exacerbating the problem.
The future of Michigan's cannabis industry remains uncertain, with many experts warning that it will be difficult for businesses to adapt to the new tax rate. As one business owner said, "We want to have a sustainable Michigan business that gives back to our customers, but with these changes, it will be difficult to navigate these waters."
The latest figures show that the recreational market saw a decline in annual sales, with adult-use dispensaries ringing up $3.17 billion in sales in 2025, down from $3.27 billion in 2024. This represents a decline of about $100 million, or 3.1%. The decline is attributed to an increase in wholesale taxes, which are expected to continue to impact the industry this year.
The Michigan Cannabis Regulatory Agency (CRA) has approved a new tax rate of 24% on cannabis products, which is expected to further reduce sales and force more businesses to close. The tax will be applied at the wholesale level, meaning that growers and processors will be responsible for paying it upfront, before passing it on to dispensaries.
Industry experts say that the tax will have a devastating impact on small businesses, particularly those in smaller cities like Hazel Park, Ferndale, and Inkster. These cities rely heavily on cannabis sales to generate revenue, but with the new tax rate, they may struggle to maintain their current levels of revenue.
Growers are feeling the pressure the most, with many already struggling to stay afloat due to decreasing prices and increasing competition. The state's regulated cannabis industry has experienced significant growth since legalization, but fluctuations in supply and demand are now causing concern.
The new tax rate is expected to lead to further closures and layoffs, as well as a decline in excise and sales taxes for local governments. Municipal budgets that rely heavily on cannabis tax revenue will also be impacted.
Business owners say that the industry is facing a "perfect storm" of challenges, including oversupply, increasing competition, and high wholesale taxes. They fear that more consumers will turn to an illicit market, which does not face steep tax rates, further exacerbating the problem.
The future of Michigan's cannabis industry remains uncertain, with many experts warning that it will be difficult for businesses to adapt to the new tax rate. As one business owner said, "We want to have a sustainable Michigan business that gives back to our customers, but with these changes, it will be difficult to navigate these waters."
I'm not surprised to see Michigan's cannabis market tanking 
. The oversaturation of dispensaries and cultivators was always going to lead to trouble. And now this new 24% tax rate? It's just another nail in the coffin 
. Small businesses are already struggling, and with this tax, they'll be forced to close up shop. It's not like the big corporations will be affected... 
. Meanwhile, people are going to turn to the black market because it's cheaper and more convenient. I mean, who needs to pay extra for a product just to support the state? 
The state needs to rethink its approach to cannabis regulation and find a way to make this industry sustainable again. Otherwise, we'll see a lot of business closures and layoffs... not good for anyone 
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. I mean, I get it, the market's oversaturated and prices have dropped, but 550 dispensaries closing? That's like, a lot of people losing their jobs 
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. And now they're introducing this new 24% tax rate on wholesale products? That's a lot of pressure on small businesses in cities that rely on cannabis sales to stay afloat 
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. I'm hoping some smart solutions come out of this soon, so we can see Michigan's cannabis industry thrive again 
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. It's like the industry thought they were invincible after cannabis was legalized in Michigan 
. Thousands of people lost their jobs... it's just heartbreaking 
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. Everyone knows that doesn't pay taxes, but come on, do we really need to encourage more people to go back to buying weed on the black market? It's like, we're trying to make things better, but this new tax rate is just going to drive it further underground 
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. The future of Michigan's cannabis industry is looking pretty bleak right now...
. And now they're gonna raise taxes even more? That's just gonna make it even harder for these businesses to stay afloat. Small towns are already getting hit hard, I feel bad for those guys 
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. I mean, when you think about it, the industry was always gonna face some challenges, but 24% wholesale tax? That's just crazy talk! 
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