Jerry Millen, owner of Greenhouse of Walled Lake dispensary, thinks smaller dispensaries are in for a tough time as Michigan legal cannabis prices drop. Credit: Greenhouse

Michigan cannabis prices are hitting freefall as dispensary owners worry they’re saddled with an overstocked product with few avenues to sell. Shop owners tell Grown In that product oversaturation as well as increasing corporate consolidation could soon make it impossible for small businesses to operate profitably.

Jerry Millen, owner of Greenhouse in Walled Lake, said Michigan made a mistake by not capping licenses when adult use sales was legalized in 2018.

“It is just pure chaos,” Millen said. “Everyone chose a fast buck to get into the market and now they can’t move any of it because people all grow the same product for the same price. It’s a race to the bottom.”

Pointing out the steep decline in price, Millen reports that a wholesale pound of weed once available for $3,000 is now available for as little as $600.

Total sales from November 2021 to February 2022 were $509,282,449, with an average of $127,320,612.25 over four months. Michigan’s dollar sales totals have essentially plateaued since July 2021. Although, since unit prices have been declining, it seems unit sales have commensurately increased, keeping overall dollar totals level

Jake Abraham, owner of dispensaries Sticky in Ypsilanti and Detroit, said that customers tend to buy more products when it’s cheaper and that they attract many out-of-state buyers as a result. He said that his cartridges now go for as low as $10 compared to $25 last year. 

Both he and Millen claim that the Michigan underground market is also undercutting legal unit prices as well.

“They sold people a bunch of dreams and put nothing in place to protect them,” Abraham said. “There’s so much weed growing here and nothing to stop weed coming from out of state coming here.”

Millen and Abraham say there is an overabundance of dispensaries in smaller areas that is driving prices down as well, pointing out places such as Monroe Charter Township’s nine dispensaries, which serve a local population of less than 15,000 people.

Operators are getting squeezed by the need to pay employees adequate wages and the plummeting price of flower.

A worker in the cannabis industry for 15 years, Millen said that he remains successful by curating a loyal customer base, catering to primarily women and the elderly. With around 1,000 customers a day, Millen said that a loyal base is what smaller shops need to survive.

Abraham employs 100 people across his two stores, which includes day-to-day operations, human resources, marketing, and packaging/processing. Even so, he’s bullish enough on the future that he seeks to open up three more stores within the next 60 days. 

“It’s not the end of the world though. People need to learn how to weather the storm and adjustments of their business practices will help,” Millen said. “The people who will survive are ones who care about the industry and provide great customer service. People know authenticity when they see it.”

Andrew Rost, a cultivator and co-owner for New Genetics Dimondale, said he is still optimistic about the industry, though understands not everyone will be around. 

“We have to evolve and grow smarter. Since we started, our goal has been to increase efficiency in each harvest with minimal waste,” Rost said. “We aren’t in it to get rich and cash out tonight. We’re in it because we love the people we work with and enjoy the product. At the end of the day, the best ones will come out on top of it.”

Millen and Abraham believe that opening up more dispensaries in Detroit could help the broader state market if a new ordinance is passed next month by City Council on Apr. 5. The state has yet to issue recreational licenses in city limits as local officials try to create a more equitable playing field for Detroiters.

Millen doubts Detroit will actually get new licenses out the door this year though, as he predicts the city’s ordinance will just get tied up in litigation like the last one.

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Trey Arline is Grown In’s Midwest Reporter. He was most recently with the Daily Herald, but has also reported for Vegas PBS, The Nevada Independent, and the Associated Press.