Licensed cannabis dispensaries in Michigan rang up a record $3.06 billion in sales in 2023, a 25% increase over 2022.
To put that into perspective, the total sales of medical and recreational cannabis last year equates to $385 worth of cannabis for each adult in the state.
The year ended with the highest month of sales on record. In December, dispensaries sold $279.9 million worth of cannabis, beating the previous monthly record of $276.5 in sales set in July 2023.
A vast majority of the sales were recreational, also known as adult use, which amounted to $2.74 billion in 2023.
The impressive amount of cannabis sales translates into a substantial windfall in taxes for cash-strapped local governments and the state. With a 10% excise tax on recreational cannabis sales, more than $274 million will go to local governments, schools, and roads this year, according to a Metro Times analysis.
On top of that, a 6% sales tax is imposed on all recreational and medical sales. That’s an additional $183.6 million that can be used on schools, roads, public health, and revenue sharing.
In total, cannabis sales last year generated $457.6 million in new taxes, a massive amount of money at a time when governments are struggling.
Since recreational cannabis sales began in Michigan in December 2019, the annual sales have increased every year as the industry continues to grow.
In 2023, 120 new dispensaries opened statewide, bringing the total to about 750.
Sales were boosted by Detroit’s entry into the recreational cannabis industry last year. Since the beginning of 2023, numerous adult-use dispensaries and other cannabis businesses have opened in Detroit. So far, the city has awarded 70 recreational cannabis licenses, and the city’s ordinance allows up to 160 recreational cannabis licenses. Of the licenses awarded so far, 45 of them are dispensaries that also received state approval to open.
Despite the promise of new tax revenue for communities that allow recreational cannabis sales, most of the state’s cities and towns have prohibited adult-use sales. In November, voters in Birmingham, Grosse Pointe Park, Rochester, and Keego Harbor rejected proposals that would have allowed recreational cannabis sales in their communities.
The nascent industry hasn’t been without challenges. The average price of an ounce of adult-use flower dropped from $512 in January 2020 to $80 in January 2023 as the market became saturated with cannabis.
While this was good news for consumers, it was a nightmare for dispensaries and growers trying to stay afloat. The average price of an ounce of flower crept up to $90.08 in December 2023, providing some relief for businesses.
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