Michigan’s Cannabis Market Faces Oversupply Crisis

News Summary

Michigan’s cannabis market is in crisis, experiencing a notable oversupply and declining sales. Total cannabis sales dropped to $261.1 million in June 2025, with medical marijuana sales plummeting 72% from last year. As major operators exit the market, concerns mount over increased competition and reduced profit margins. The state continues to issue new licenses despite calls for a slowdown, exacerbating the challenges for existing businesses. Analysts predict total sales of approximately $3.14 billion for 2025, a decline from previous records, highlighting the need for improved regulations.

Walled Lake, Michigan — Michigan’s cannabis market is experiencing a significant oversupply crisis, leading to declining sales and the exit of major operators from the state. In June 2025, total cannabis sales fell to $261.1 million, marking an $11.5 million decrease from May. This downward trend is placing increasing financial pressure on cannabis businesses, particularly those with high overhead costs.

The state reported a 12% decline in medical marijuana sales and a 4.2% dip in adult-use recreational sales for the same month. Cumulatively, total cannabis sales for the first half of 2025 reached $1.58 billion, a slight 0.7% drop compared to last year. Meanwhile, adult-use sales accounted for a substantial $1.57 billion, closely mirroring the previous year’s figures, while medical marijuana sales plummeted by an astonishing 72% year-over-year, falling from $12.7 million to just $3.5 million.

Many cannabis business owners, including Jerry Millen of Greenhouse in Walled Lake, express concerns about the market’s oversaturation. With an influx of new operators and ongoing competition, profit margins are decreasing. In addition, some companies have already started shuttering locations. The cookies location owned by Canadian company TerrAscend in Ann Arbor is set to close by the end of August, following a recent trend of dispensaries like Arbors Wellness and Leaf and Bud also exiting the market.

TerrAscend’s move comes as the company aims to divest its assets in Michigan, which include four growing facilities and 20 dispensaries. This strategic exit is reportedly part of a broader effort to tackle debt. As the cannabis market continues to struggle, the company’s exit is expected to result in a 21% reduction in its workforce.

Besides the changing landscape of sales, several factors are contributing to the market’s current challenges. The legalization of recreational marijuana in Ohio has reduced cross-border trading, while consumers are increasingly choosing to cultivate cannabis at home or purchase it from friends instead of dispensaries. In Michigan, the aggressive price competition has forced many businesses to lower their prices or sacrifice product quality.

Price drops have resulted in drastic reductions in the average cost of cannabis. For instance, the price of cannabis flower has fallen from more than $200 per ounce in June 2021 to approximately $63 per ounce recently, reflecting a remarkable 70% decrease. This decline has been accompanied by an oversupply of cannabis, with Michigan’s Cannabis Regulatory Agency reporting approximately 1.19 million pounds of fresh frozen cannabis awaiting processing at the month’s end.

Despite these challenges, the regulatory environment in Michigan remains permissive, with state law allowing for unlimited cannabis business licenses as long as applicants meet required regulations. However, local municipalities may still impose their own limitations. Even as operators call for a halt on issuing new licenses to stabilize the market, new growing licenses continue to be granted, leading to an increase of 470,000 plants added to a total of 3.2 million.

Industry analysts project a total sales figure of approximately $3.14 billion for 2025, albeit a decline from 2024’s record figures. The Detroit area has notably seen several dispensaries preparing to close amid the challenges posed by TerrAscend’s exit, with major locations affected in Oxford, Center Line, and Adrian.

As the market faces these obstacles, cannabis advocacy groups stress the necessity for improved regulations over the commercialization of marijuana. Industry insiders continue to voice concerns about the influx of unlicensed and illicit cannabis, which complicates efforts to maintain a sustainable business environment. In light of the ongoing challenges, the Michigan Cannabis Regulatory Agency is working to enhance enforcement mechanisms to better regulate the thriving yet tumultuous cannabis industry.

Deeper Dive: News & Info About This Topic

• Detroit News: Michigan Marijuana Businesses Oversupply Falling Prices
• Wikipedia: Cannabis in Michigan
• Bridge Michigan: Michigan Marijuana Market Cratering Amid Oversupply
• Google Search: Michigan cannabis market 2025
• Crain’s Detroit: Michigan Weed Prices Plunge Again
• Google Scholar: Michigan cannabis oversupply
• Metro Times: Michigan’s Struggling Cannabis Industry Pushes for Urgent Reforms
• Encyclopedia Britannica: Cannabis
• Detroit Free Press: Michigan Cannabis Regulator Urges Industry to Lobby
• Google News: Michigan cannabis industry