Michigan’s cannabis market capped off 2024 with another record-breaking milestone, as recreational sales surpassed $3 billion for the first time.
But as the state’s market matures, its rapid growth is finally slowing.
Licensed retailers brought in $3.27 billion in recreational cannabis sales in 2024, a 9.9% increase from the $2.98 billion recorded in 2023, according to the Michigan Cannabis Regulatory Agency (CRA) and reporting from Cannabis Business Times. The December numbers alone accounted for $264.7 million, pushing Michigan’s total recreational sales since adult-use legalization in December 2019 past $10.2 billion.
There are more than 2,255 recreational cannabis licenses in Michigan, compared to 1,189 in 2021, 1,876 in 2022, and 2,170 in 2023.
Only California, Colorado, and Washington have crossed that $10-billion mark in cumulative recreational use sales.
Still, Michigan’s growth is slowing down compared to its earlier years. After surging by 55% in 2022 and 46% in 2023, the 9.9% year-over-year increase in 2024 signals a shift in the market. The reason? Prices continue to plummet.
In December, the average price of recreational flower hit a record low of $69.20 per ounce. For the entire year, the average was $82.50 — down 10.3% from 2023 and a staggering 35% from 2022’s $128 per ounce.
By comparison, the average price for an ounce of recreational flower reached $512 in January 2020, when legal sales began.
But falling prices haven’t dampened demand. Michigan retailers sold more than 1.1 million pounds of adult-use flower in 2024, a 17% increase over 2023 and more than double the volume sold in 2022. Flower remains the dominant product, followed by vape cartridges and edibles.
A new study by LeafLink ranks Michigan second in the nation for marijuana sales per resident, trailing only Alaska, where tourism has boosted sales.
The state’s best sales month on record came in August 2024, with $294.1 million in recreational revenue. Meanwhile, Michigan’s medical cannabis market continued to shrink, ending 2024 with just $18 million in total sales — less than 1% of the state’s cannabis market. At its peak in 2021, the medical market generated $481 million, but adult-use pricing has steadily eroded its dominance.
The success of adult-use cannabis has also been a boon for local governments, schools, and infrastructure. Unlike medical cannabis, which is tax-exempt, adult-use sales are subject to a 10% excise tax and a 6% sales tax. This growing revenue source continues to provide a financial windfall for municipalities that have embraced cannabis businesses.
In early 2024, the state sent more than $87 million to 269 municipalities and counties as part of their share of excise taxes in 2023. That includes 99 cities, 69 townships, and 71 counties.
The communities and counties each receive more than $59,000 annually for every licensed cannabis dispensary and microbusiness located within their jurisdictions.
For cities that have embraced the industry, the revenue turned into a windfall.
Michigan remains the nation’s second-largest cannabis market. Its $3.29 billion in combined adult-use and medical sales in 2024 represents a 7.6% overall increase from the previous year.
Since legalization, Michigan retailers have sold more than $11.5 billion in cannabis products, a testament to the enduring demand even as competition and price drops reshape the landscape.
As more communities opt into adult-use sales and neighboring states like Ohio ramp up their cannabis programs, Michigan’s market is poised for steady — if slower — expansion in the years to come.
