The continued free fall of retail marijuana prices in Michigan is great for customers, tough on business.
Profit margins look to cinch even more, at least in the short-term, as a surplus of newly harvested marijuana enters both the legal and illicit markets during what is known in the marijuana industry as “croptober,” harvest time for outdoor farms. Croptober sparked a $30 month-to-month, price-per-ounce decline in 2020 and $13 in 2021.
In an economy that’s experiencing significant inflation – grocery prices are up 13% in the last year – marijuana is an anomaly.
Marijuana insiders point to the growing glut of marijuana being produced by businesses licensed for nearly 1.5 million plants at any given time in an state where only about 200 of 1,773 communities have opted to allow recreational sales.
“That’s what’s causing the race to the bottom,” said Harry Barash, who operates the 8,000-member Michigan Cannabiz Professionals Facebook page and works as the cannabis industry specialist for the Southfield-based NAI Farbman real estate firm. “If you can’t get your price per pound down to a number that’s economically feasible, you better have much higher quality product to be able to compete.”
He believes Michigan’s marijuana industry is headed the direction of beer and liquor, where customers are offered low-priced products produced by massive deep-pocketed manufacturers alongside specialty, “top-shelf” liquors bottled in lower quantities at higher…
