It is no secret that Michigan cannabis businesses have had a rough time of it lately. The market consolidation that took three to five years in other maturing legal cannabis states compressed into the span of roughly 18 months in Michigan in which the wholesale price of marijuana cratered by an astounding 90%. This is in a state that most MSOs had already passed on, primarily due to the unlimited state license structure.
Over-leveraged and cash-poor companies with limited to no options for traditional financing found no help from the private equity market, which appears to have pulled up stakes for the younger and more fertile East Coast. But those quick to write Michigan off are not paying close enough attention.
Take, for example, the wholesale price of marijuana. According to Leaflink’s Wholesale Cannabis Pricing Guide, Michigan had a 3.2 score in 2020 (1 being the highest on a 1 – 10 scale). At the time, Michigan had the third highest flower prices in the country, and the second highest concentrate prices in the country, while the more mature states in the West and Southwest had the lowest.
But in Leaflink’s 2022 Guide, even though Michigan’s score fell to 4.8, it was still well above the more mature West and Southwest markets and continues to hold the spot for the third-highest flower prices in the country. It is in the edibles and cartridges that the state has seen the steepest declines. Still, after the expected brief Croptober dip, Michigan has seen its prices level off and even tick up slightly. The …