Michigan's cannabis market is in trouble, with a new tax threatening to shut down more dispensaries and lay off thousands of employees. The state's recreational cannabis industry has been struggling since its inception in December 2019, with prices plummeting and over 550 businesses closing.
The latest numbers show that sales have declined by 3.1% from last year, with adult-use dispensaries ringing up $3.17 billion in revenue. While this may seem like a small decline, it's a worrying trend for an industry that has already seen significant growth.
The problem is an oversaturated supply, with too many growers and processors entering the market at once. This has led to a price war, with prices falling by as much as 25% in some cases. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier.
The new 24% wholesale tax is expected to exacerbate the problem, forcing more businesses to close and lay off employees. The tax will also reduce the amount of money that dispensaries and processors can make on each sale, making it harder for them to stay in business.
"It's like they took advantage of a fledgling industry that isn't organized," says Stuart Carter, owner of Utopia Gardens and a cultivation facility. "Now everyone is scrambling to figure out what to do."
The tax will also limit competition in some areas, with municipalities limiting the number of dispensaries allowed. This could have significant implications for smaller cities like Hazel Park and Ferndale, which rely heavily on cannabis taxes.
For cannabis workers, this is a nerve-racking year. Michigan's regulated cannabis industry remains a major employer, but the uncertainty surrounding the new tax has left many employees worried about their jobs.
As one dispensary owner puts it, "People are really scared. I have employees asking me if they're going to still have a job."
The state of Michigan is also at risk, with the loss of excise and sales taxes expected to have significant implications for local budgets. The payments have become an important revenue stream in some cities and townships.
"It's like the state is going to lose money because of this tax," says Stewart. "And if that happens, it's going to be harder for the industry to recover."
For now, dispensaries and processors will have to find a way to adapt to the new tax. But as one cannabis business owner puts it, "It's not going to be easy."
The latest numbers show that sales have declined by 3.1% from last year, with adult-use dispensaries ringing up $3.17 billion in revenue. While this may seem like a small decline, it's a worrying trend for an industry that has already seen significant growth.
The problem is an oversaturated supply, with too many growers and processors entering the market at once. This has led to a price war, with prices falling by as much as 25% in some cases. The average retail price for an ounce of recreational flower fell to $58.20 in December 2025, down from $69.20 a year earlier.
The new 24% wholesale tax is expected to exacerbate the problem, forcing more businesses to close and lay off employees. The tax will also reduce the amount of money that dispensaries and processors can make on each sale, making it harder for them to stay in business.
"It's like they took advantage of a fledgling industry that isn't organized," says Stuart Carter, owner of Utopia Gardens and a cultivation facility. "Now everyone is scrambling to figure out what to do."
The tax will also limit competition in some areas, with municipalities limiting the number of dispensaries allowed. This could have significant implications for smaller cities like Hazel Park and Ferndale, which rely heavily on cannabis taxes.
For cannabis workers, this is a nerve-racking year. Michigan's regulated cannabis industry remains a major employer, but the uncertainty surrounding the new tax has left many employees worried about their jobs.
As one dispensary owner puts it, "People are really scared. I have employees asking me if they're going to still have a job."
The state of Michigan is also at risk, with the loss of excise and sales taxes expected to have significant implications for local budgets. The payments have become an important revenue stream in some cities and townships.
"It's like the state is going to lose money because of this tax," says Stewart. "And if that happens, it's going to be harder for the industry to recover."
For now, dispensaries and processors will have to find a way to adapt to the new tax. But as one cannabis business owner puts it, "It's not going to be easy."
. I mean, they're already struggling with so many businesses closing and employees losing their jobs, and now this new 24% wholesale tax is just going to make things worse. It's like, how are dispensaries supposed to stay afloat when they can't even make enough money from the products they sell? And what about all these little cities that rely on cannabis taxes for revenue? It's not good 
. I feel bad for all the people who are going to lose their jobs or have their businesses shut down because of this tax. We need some kind of help for them, like maybe some financial assistance or something 
.
michigan's cannabis industry is already strugglin and now dis new tax is gonna push them over the edge 
i hope sum1 can help dem find a way 2 adapt 2 this new tax cuz its def not gonna b easy 
michigan's cannabis market has been struggling since 2019 and now with this new 24% wholesale tax, it's like they're gonna shut down all the dispensaries 
what's the point of having an industry if you can't support all the people involved in it? 
michigan's cannabis market was already struggling, but this is taking it to a whole new level. i mean, 25% price drop in some cases? that's crazy! and now they're gonna lay off thousands of employees? that's just heartbreaking 
The average retail price dropped from $69.20 to $58.20 in just a year that's a wild swing 
especially for smaller cities like Hazel Park and Ferndale where cannabis taxes are a big revenue stream 
. The stats on layoffs are also concerning, thousands of employees might lose their jobs 
. Did you know that California's cannabis market has been growing at a rate of 18% per year since legalization? 
Maybe Michigan can learn from their example 
.
- from $69.20 in Dec 2024 to $58.20 in Dec 2025, that's a 16% drop 
(24% wholesale tax isn't helping). And it's not just the dispensaries, but also the cities and townships relying on these taxes 
. Can't we just let the market do its thing and sort itself out instead of imposing more taxes on it? It's like they're trying to put the brakes on innovation and progress 
. Anyway, I guess only time will tell if dispensaries can find a way to adapt... but I'm not holding my breath 
. And now this new tax is gonna make things even harder. It's like they're putting the squeeze on a bunch of small businesses that are just trying to make a living 
. And what about all those employees who are already worried about their jobs? It's a lot of uncertainty right now 
.
. Like, what's the point of even having a regulated industry if it's just gonna get shut down by the government? 
i need some data on how this tax was even implemented and what the state is planning to do with all that lost revenue...
I mean, I'm not saying it's all bad news, but this tax is just gonna make things worse for everyone involved