As the state of Michigan continues to rake in money from the sale of recreational marijuana, many people in the state wonder why it is that the cannabis products they buy aren’t decreasing in price. For those who shop for marijuana often, it may seem that the cost of cannabis products is too high and stays that way over time. Compared to the price of marijuana in other states where it is legal, it’s true that Michigan can be more expensive, especially when compared with states like Colorado or Oregon. These states have well established recreational marijuana programs and plenty of supply to feed the market after years of working out the kinks in the system.
By contrast, here in Michigan, there are a small amount of cannabis growers trying to feed a high demand. The recreational marijuana program in this state is relatively new and still needs some refinement to balance supply and demand. Many of these marijuana producers are former compassionate care growers with a different business model and experience who have recently shifted to the recreational market. These farms may struggle to keep up with the increased demand, resulting in an uneven supply. When they do have product in stock, they can set a high price point thanks to lack of competition.
While users may find the price of marijuana prohibitive, those in charge feel the pricing is an important part of regulating the market. According to the Michigan government, the price of marijuana at the wholesale level has decreased over time. They have conducted studies that show the price of an ounce of recreational marijuana has gone down since legal sales began in the state. One of the major reasons for prices dropping over time is the increased number of growers authorized to provide marijuana in Michigan. The state government has authorized cultivators to grow over 500, 000 plants over time, which is more than ever before. With more suppliers joining the market, the price of products is likely to decrease so each grower can stay competitive. Shoppers can expect more deals, lower prices and loyalty programs to keep them loyal to one shop and the strains and products they carry.
Administrators have also expressed the viewpoint that the price of marijuana should not go too low, or the market risks no longer being competitive. In fact, this already happened in Oregon, where there are many growers who flood the market with product. To avoid this happening, Michigan authorities will approve more growers and suppliers slowly over time. This will prevent flooding of the market all at once with an abundance of product.
Eventually the market for marijuana in Michigan will regulate itself and prices will drop, just as they have in other states where recreational marijuana has been legal for some time. Experts predict this can happen as soon as 2022.