Michigan's cannabis market is facing a bleak future as a new tax threatens to shut down even more dispensaries and lay off thousands of employees. Since recreational sales began in December 2019, the industry has been plagued by declining prices, with over 550 businesses closing and thousands losing their jobs.
The latest blow came in December 2025, when adult-use cannabis sales fell by 3.1% to $3.17 billion, marking the first decline in annual sales since recreational sales began. This is a far cry from the growth the industry experienced in previous years, with Michigan becoming one of the top producers in the country.
The main culprit behind the decline is an oversaturated supply of cannabis products. As more businesses enter the market, prices plummet and margins shrink, making it difficult for smaller operators to stay afloat. The new 24% wholesale tax will further exacerbate the problem, forcing many dispensaries and processors to close their doors or significantly reduce operations.
The impact on workers is already being felt, with many employees fearing for their jobs as the industry continues to shrink. Municipal budgets are also at risk, as local governments rely heavily on cannabis excise tax revenue.
Business owners like Tom Farrell, owner of Refinery dispensaries, say they're struggling to adapt to the changing market. "We're losing money every day," he says. "It's slower than it has ever been."
The new 24% wholesale tax was passed by the state legislature despite opposition from many in the industry and consumer advocacy groups. Gov. Gretchen Whitmer signed the bill into law, touting it as a way to raise revenue for the state.
However, critics argue that the tax will only lead to more closures and layoffs, harming small businesses and communities that rely heavily on cannabis sales. "They took advantage of a fledgling industry that isn’t organized," says Stuart Carter, owner of Utopia Gardens dispensary. "Now everyone is scrambling to figure out what to do."
As the market continues to shrink, it remains to be seen whether the state can find ways to mitigate the impact on workers and communities. For now, dispensaries, growers, processors, and other cannabis businesses will have to navigate these uncertain waters.
The situation has brought fears of an illicit market resurgence, as more consumers turn back to black markets that don't face steep tax rates. This could ultimately lead to a loss of revenue for the state in the future.
With sales declining and profits shrinking, Michigan's cannabis industry is facing an uncertain future. Will lawmakers find ways to adapt and ensure the survival of small businesses and employees? Only time will tell.
The latest blow came in December 2025, when adult-use cannabis sales fell by 3.1% to $3.17 billion, marking the first decline in annual sales since recreational sales began. This is a far cry from the growth the industry experienced in previous years, with Michigan becoming one of the top producers in the country.
The main culprit behind the decline is an oversaturated supply of cannabis products. As more businesses enter the market, prices plummet and margins shrink, making it difficult for smaller operators to stay afloat. The new 24% wholesale tax will further exacerbate the problem, forcing many dispensaries and processors to close their doors or significantly reduce operations.
The impact on workers is already being felt, with many employees fearing for their jobs as the industry continues to shrink. Municipal budgets are also at risk, as local governments rely heavily on cannabis excise tax revenue.
Business owners like Tom Farrell, owner of Refinery dispensaries, say they're struggling to adapt to the changing market. "We're losing money every day," he says. "It's slower than it has ever been."
The new 24% wholesale tax was passed by the state legislature despite opposition from many in the industry and consumer advocacy groups. Gov. Gretchen Whitmer signed the bill into law, touting it as a way to raise revenue for the state.
However, critics argue that the tax will only lead to more closures and layoffs, harming small businesses and communities that rely heavily on cannabis sales. "They took advantage of a fledgling industry that isn’t organized," says Stuart Carter, owner of Utopia Gardens dispensary. "Now everyone is scrambling to figure out what to do."
As the market continues to shrink, it remains to be seen whether the state can find ways to mitigate the impact on workers and communities. For now, dispensaries, growers, processors, and other cannabis businesses will have to navigate these uncertain waters.
The situation has brought fears of an illicit market resurgence, as more consumers turn back to black markets that don't face steep tax rates. This could ultimately lead to a loss of revenue for the state in the future.
With sales declining and profits shrinking, Michigan's cannabis industry is facing an uncertain future. Will lawmakers find ways to adapt and ensure the survival of small businesses and employees? Only time will tell.
I mean, it's already been declining for a while now, but this new 24% wholesale tax is just too much 
I remember when recreational sales started in 2019 and the industry was booming 
. Now it's like, what's going on? Where did all the money go? 
I'm also thinking about those small business owners who are struggling to adapt 
. They're already losing money every day 
. And what about all the employees who are going to lose their jobs? 
I'm just hoping that lawmakers will figure out a way to help these businesses and workers out 
. It just makes it harder for people to buy stuff from dispensaries and even worse for the little guys who own those places. They're already struggling, and this new 24% wholesale tax is like pouring gasoline on a fire 
.
. Maybe they could offer some kind of relief or support for the little guys? That way, everyone can benefit from this industry instead of just the big companies 
. I mean, come on, 24% wholesale tax? That's like asking a small business to take a huge leap of faith 
. What's the state legislature even thinking? It's not like they're addressing the real issue – oversaturation 
. They should be finding ways to regulate the market instead of slapping more taxes on it.
. This is like a classic example of trickle-down economics gone wrong 
.
. Maybe some kind of tax reform or even a regulatory overhaul? Something, anything, before more dispensaries close their doors and thousands lose their livelihoods 
. We need lawmakers who care about the little guy, not just lining the pockets of big-time investors 
. It's like they forgot all about the whole "regulated industry" thing they were all about. Guess they didn't think it through too well... 
.
. It's like the state is saying, "Hey, good luck with that, you're on your own!" 
.
.
