Michigan's Cannabis Market is in Crisis as New Tax Threatens More Closures and Layoffs
The recreational cannabis market in Michigan has been on a downward spiral since its inception, with prices plummeting, businesses closing, and employees losing their jobs. The latest blow to the industry comes in the form of a 24% wholesale tax, which has already sent shockwaves through the market.
Since recreational sales began in December 2019, over 550 dispensaries and cultivators have shut down, laying off thousands of workers. The number of active cannabis licenses in Michigan has also declined for the first time, with 2,171 licenses remaining as of December 2025, down from a peak of 2,956 in 2024.
The new tax is expected to exacerbate the problems facing the industry, with growers and processors feeling the pressure the most. The state's wholesale market is anticipated to shrink by 14%, according to estimates, which will further reduce sales revenue for dispensaries and other cannabis businesses.
Industry insiders warn that the tax will have a devastating impact on small businesses and entrepreneurs who are struggling to stay afloat in an already oversaturated market. "There is way too much supply," says Tom Farrell, owner of Refinery dispensaries. "The larger corporate retailers are going to be the ones to weather this storm, but it's going to leave smaller operators like me struggling to survive."
As the industry grapples with declining sales and increasing costs, business owners are worried that more consumers will turn to the illicit market, further eroding revenue for licensed businesses. "We want to have a sustainable Michigan business that gives back to the customers," says Brian Farah, CEO of Hello Farms. "But with these changes, it's going to be difficult to navigate these waters."
The state Senate has introduced legislation aimed at reducing competition and limiting new dispensary licenses in municipalities that already exceed a certain threshold. While some industry insiders support this measure, others argue that it will stifle innovation and limit access to the market for small businesses.
For cannabis workers, the future looks uncertain. The regulated cannabis industry remains a major employer, with 41,248 workers counted in December 2025, but many are worried about their job security as the market continues to shrink. "People are really scared," says Farrell. "I have employees asking me if they're going to still have a job."
As the situation continues to unfold, industry experts warn that Michigan's cannabis market will need significant support and innovation to survive. The state's politicians would do well to listen to the concerns of business owners and workers before implementing further measures that could exacerbate the crisis facing the industry.
The recreational cannabis market in Michigan has been on a downward spiral since its inception, with prices plummeting, businesses closing, and employees losing their jobs. The latest blow to the industry comes in the form of a 24% wholesale tax, which has already sent shockwaves through the market.
Since recreational sales began in December 2019, over 550 dispensaries and cultivators have shut down, laying off thousands of workers. The number of active cannabis licenses in Michigan has also declined for the first time, with 2,171 licenses remaining as of December 2025, down from a peak of 2,956 in 2024.
The new tax is expected to exacerbate the problems facing the industry, with growers and processors feeling the pressure the most. The state's wholesale market is anticipated to shrink by 14%, according to estimates, which will further reduce sales revenue for dispensaries and other cannabis businesses.
Industry insiders warn that the tax will have a devastating impact on small businesses and entrepreneurs who are struggling to stay afloat in an already oversaturated market. "There is way too much supply," says Tom Farrell, owner of Refinery dispensaries. "The larger corporate retailers are going to be the ones to weather this storm, but it's going to leave smaller operators like me struggling to survive."
As the industry grapples with declining sales and increasing costs, business owners are worried that more consumers will turn to the illicit market, further eroding revenue for licensed businesses. "We want to have a sustainable Michigan business that gives back to the customers," says Brian Farah, CEO of Hello Farms. "But with these changes, it's going to be difficult to navigate these waters."
The state Senate has introduced legislation aimed at reducing competition and limiting new dispensary licenses in municipalities that already exceed a certain threshold. While some industry insiders support this measure, others argue that it will stifle innovation and limit access to the market for small businesses.
For cannabis workers, the future looks uncertain. The regulated cannabis industry remains a major employer, with 41,248 workers counted in December 2025, but many are worried about their job security as the market continues to shrink. "People are really scared," says Farrell. "I have employees asking me if they're going to still have a job."
As the situation continues to unfold, industry experts warn that Michigan's cannabis market will need significant support and innovation to survive. The state's politicians would do well to listen to the concerns of business owners and workers before implementing further measures that could exacerbate the crisis facing the industry.
I'm totally freaking out about this new tax in Michigan! It's like, how are dispensaries supposed to stay afloat with 24% more expenses? The prices are already super low for customers, so now we're talking about more closures and layoffs? 
I mean, I get it that the market is oversaturated, but come on! Can't they just find a way to make it work? 
The small businesses are going to get crushed. I'm all about layout and design, and if the industry can't even get its act together, how am I supposed to create a visually appealing website for my own cannabis business? 
. You got a whole industry that's just trying to make it work, but nobody seems to be able to catch a break. The tax is just another hammer blow, you know? It's like they're squeezing all the air out of the market and expecting everything to magically fix itself.
. I hope the politicians will take heed of the concerns of business owners and workers before implementing further measures that could exacerbate the crisis.
. It's time for a more nuanced approach that prioritizes innovation, accessibility, and job security 
The whole thing just doesn't seem right... 550 dispensaries closed already? That's a lot of people losing their jobs 
. I mean, I get that supply and demand need to be balanced, but come on... How many more people have to lose their jobs before someone does something about it? 
, who comes up with these tax hikes? Like, can't we just chill for a sec? A 24% wholesale tax is crazy and it's gonna be tough for those small businesses to keep their heads above water. I mean, what's next, a tax on breathing air? 
It's not like they're making bank or anything... and now you're telling them they gotta navigate an even more saturated market? No thanks 
and I'm not just talking about the bud 
. This new tax is a major blow, especially for small businesses like Refinery dispensaries 
or else we'll see even more closures and layoffs 
. It's not just about the business owners, though - those 41,248 cannabis workers are counting on us 
. Let's hope they can find a way to make this work and keep everyone employed 
#CannabisInMichigan #TaxCrisis #SupportSmallBusiness
... they can't compete with these big corporate retailers that have more resources. The state should consider implementing some support measures for them or reducing competition somehow. But at the same time, we don't want to stifle innovation and limit access to the market for new entrepreneurs.
... maybe the state can look into ways to increase sales revenue or reduce costs for dispensaries. Something has to give here.
. and now you're telling me there's gonna be another 14% shrink in the wholesale market? it's like they're pricing out the little guys and letting the corporate retailers reap all the rewards 
. what's worse is that people are gonna start turning to the illicit market, further destroying revenue for licensed businesses... it's a vicious cycle, man 
.
