Michigan's cannabis market, which had been booming since the legalization of recreational sales in December 2019, has hit its first annual decline, with adult-use dispensaries recording $3.17 billion in sales in 2025, down from $3.27 billion in 2024.
The downturn comes as a result of a surplus of product and steep declines in 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 and $95.08 in December 2023. This decline is largely attributed to the state's decision to impose a 24% wholesale tax on the industry, which is expected to have a significant impact on businesses.
The decline in sales also reflects a broader issue with the market's ability to sustain itself. According to data from the Michigan Cannabis Regulatory Agency (CRA), the number of active cannabis licenses has dropped by 85 from the prior year, marking the first year-over-year decrease since adult-use sales began. This trend is concerning, as it suggests that the industry may be struggling to adapt to changing market conditions.
The impact of this decline will be felt across the state, with tens of thousands of jobs at stake. The regulated industry is a major employer, with more than 41,200 workers. Dispensary employees, cultivation and processing staff, delivery drivers, compliance specialists, security teams, and others are all vulnerable to job losses if the slowdown persists.
Local governments will also feel the impact, as Michigan shares adult-use cannabis excise tax revenue with municipalities that allow dispensaries and microbusinesses to operate. This revenue stream has become an important source of income for many communities, and a decline in sales could have significant consequences for local budgets.
Despite these challenges, new growers and processors are still entering the market, albeit at a slower rate than in previous years. However, this trend is beginning to slow down, and it remains to be seen whether the industry can recover from the current downturn.
The downturn comes as a result of a surplus of product and steep declines in 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 and $95.08 in December 2023. This decline is largely attributed to the state's decision to impose a 24% wholesale tax on the industry, which is expected to have a significant impact on businesses.
The decline in sales also reflects a broader issue with the market's ability to sustain itself. According to data from the Michigan Cannabis Regulatory Agency (CRA), the number of active cannabis licenses has dropped by 85 from the prior year, marking the first year-over-year decrease since adult-use sales began. This trend is concerning, as it suggests that the industry may be struggling to adapt to changing market conditions.
The impact of this decline will be felt across the state, with tens of thousands of jobs at stake. The regulated industry is a major employer, with more than 41,200 workers. Dispensary employees, cultivation and processing staff, delivery drivers, compliance specialists, security teams, and others are all vulnerable to job losses if the slowdown persists.
Local governments will also feel the impact, as Michigan shares adult-use cannabis excise tax revenue with municipalities that allow dispensaries and microbusinesses to operate. This revenue stream has become an important source of income for many communities, and a decline in sales could have significant consequences for local budgets.
Despite these challenges, new growers and processors are still entering the market, albeit at a slower rate than in previous years. However, this trend is beginning to slow down, and it remains to be seen whether the industry can recover from the current downturn.
and now ppl r talking about job losses idk how the industry was gonna recover from this already 
but on the bright side new growers r still entering the market tho let's just hope it recovers soon 
and the prices are killin it too - $58.20 for an ounce of flower is like, so cheap 
. i get that its all about supply and demand and whatnot, but 24% wholesale tax is just too much 
. its no wonder people r startin to leave the market. those 41k jobs are at stake and thats a huge deal for michigan workers 
. local govts are also gonna feel it big time. idk what's goin on, but i hope new growers can find a way to make this work again 
! I mean, I knew prices were dropping due to a surplus of product and taxes, but I didn't think sales would take a hit so hard 
. But on the bright side, it's encouraging to see new growers and processors entering the market, even if it is at a slower pace 
. And hey, maybe this is an opportunity for the industry to regulate itself better and become more sustainable? 
Let's hope that these businesses can adapt and find ways to thrive again 
. i mean, its a big drop in prices and stuff which sounds like a recipe for disaster 
. how did the state think it would work out? 
. and its not just about the businesses losing jobs or whatever, but also local governments who rely on that tax money 
. and what about all these new growers and processors entering the market? are they trying to fix the problem or is it just a case of "more of the same" 
.
. All this hype and now it's crashing down? What happened to the good ol' days when people would pay top dollar for that weed? 
I know, I'm a nostalgic dude, but come on! The prices are too low, it's too easy... where's the fun in that? 
its really sad, cuz cannabis has been bringing in so much cash for them lately...and now they have to deal with lower prices too? ouch 
That's just devastating. I hope some entrepreneurs step up and try to turn things around