Besides both really being into shorelines and starting with the letter “M”, Michigan and Massachusetts have a lot in common with the state of their cannabis markets. Both have seen record croptobers as well as rapidly declining adult use retail prices. But while the price drops mirror each other, they are both under very different market conditions.
While Michigan is about 10 million people and Massachusetts is just over 7 million, the size of the two cannabis markets are much closer. As of September 30, Massachusetts sold $1.09 billion of adult use cannabis, while Michigan sold $1.44 billion. That means, proportionately by population, The Bay State is selling a bit more than The Mitten.
In January 2021, both states were riding on high retail prices, with averages of $6,441 and $5,178 a pound in Massachusetts and Michigan respectively. Those have since dropped 44% and 63%, also respectively (see graph above).
They’ve both seen bigger than normal croptober harvests this year, but Michigan’s has been much bigger than Massachusetts. And here is where there’s a major difference between the two states: canopy capacity. While data on total canopy is not available from either state, we know anecdotally that this year many Michigan growers, especially outdoor, planted as much as they could as the state’s sales skyrocketed in the summer. Since the state’s regulators don’t place limits on the number of licenses, capacity boomed.
Massachusetts has a different regime. First, entities are limited to one cultivation license per state, and second, the state has closely watched canopy sizes, tiering up by 10,000 square foot sizes, up to 90,000, which is big, but still short of some of Michigan’s 100,000+ square foot facilities. In other words, you can grow your capacity in Massachusetts, but only gradually and only so much.
This seems to have limited this year’s croptober impact in Massachusetts somewhat. We’ll have to see if next year’s crop continues to ramp up, or if the market corrects itself in 2023.