When we talk about marijuana sales in the US, generally, we expect to hear big numbers. It’s usually true for most states, but Michigan seems to be experiencing otherwise. There has been a drop in Cannabis sales in the last six months, and people are curious to know why.
The Initial Surge in Sales
Cannabis sales hit an all-time high in July 2020. Since then, it’s been on a downward slope. Back in 2019, when the first marijuana store opened, the marijuana sales shot up at an incredible rate. In January 2020, $35 million sales were recorded, which gradually rose to $110 million a month by July 2020.
However, November recorded a dip in sales with $92 million while December sales were approximately $101 million.
Although the numbers don’t seem too bad, the experts are worried by the dip considering the enormous boost in sales in the first quarter. Especially when marijuana consumption is going up, there is no reason why the sales should come down.
Leafly shares insights on what went wrong with marijuana sales in Michigan.
The Mysterious case of Marijuana Sales
Chris Silva is a manager of Grand Rapids’ Pharmhouse Wellness dispensary. He believes that marijuana consumption hasn’t gone down, but there have been lesser sales from the dispensaries, which leaves the investigators to explore two critical aspects.
- Why are people not buying from the dispensaries?
- Where are they getting marijuana from?
The Access to Regulated Marijuana
Historically, regulated marijuana sales have had a topsy turvy ride. Therefore, the consumers’ trends suggest they have left the regulated market and opted for self-sufficiency. Now, people are more focused on growing their marijuana, and it seems to be working.
So, what prompted the consumers to grow their weed? Here are some factors:
Licensed Products Didn’t Have Great Reviews
Initially, medical marijuana was grown by caregivers who supplied it to the patients. Interestingly, the product had a high-quality taste, which is why most people expected tremendous outcomes from the marijuana industry in Michigan.
As caregivers grew weed, they became experts of the trait, understanding the plants’ aroma and taste. However, after the regulations for medical marijuana, licensed commercial growers jumped on the bandwagon.
Many consumers believe that the large-scale growth of weed may be a factor in the dip in the products’ quality. For many, the taste seems inferior, and it’s nothing like the earlier products.
One of the weed shop employees suggested that the people don’t appear too happy with the commercial market’s weed quality.
Tami Vandenberg is the co-founder of the West Michigan Cannabis Guild, advocates for the legalization of marijuana. He believes that weed’s quality before adult-use legalization was much better, which is now reduced to half. He believes that the lack of quality shows in sales, so it’s not a surprise.
Some industrial experts believe that the state requirements for marijuana storage are quite strict. Ultimately it forces them to produce sterile marijuana with irradiated flowers at times. Therefore, it results in low-quality terpenes with low potency.
Since spring last year, there have been numerous complaints on social media platforms regarding lack of taste, quality, and low potency.
The COVID-19 Effect
Robin Schneider is the executive director of the Michigan Cannabis Industry Association. She thinks that marijuana sales have a lot to do with people losing their jobs due to the pandemic. Interestingly, her focus is on more than 400,000 tip workers who form a seemingly large portion of the marijuana consumer community.
According to Robin, tip workers like hairstylists, wait staff, etc., may consume more marijuana because of less employment discrimination.
Because daily wage workers suffered the most during the pandemic, they haven’t shown up on weed shops, so that the sales may be going down.
Jamie Cooper and Silva from Sensei Connects also believe that low marijuana sales have much to do with people losing their jobs.
Unlicensed Market is Rising
Rick Thompson from MINORML and MILegalize advocates that the unregulated market is a prime reason for the dip in licensed sales. He believes that the Michigan-based caregivers that were turned down by the state may be a cause for it.
During the legalization, the state shutdown many caregivers. However, it seems that the licensing didn’t stop them from distributing marijuana within the state.
Thompson adds that such caregivers piled up new weed stocks, hitting the commercial production levels when there were no restrictions from the state. However, it doesn’t mean that they stopped growing the plant once they were legally shut down.
Also, some speculators believe that the out-of-state products are another reason for the sales dip. As Washington and Oregon supply their surplus weed through USPS and UPS, it has direct impacts on the sales from within Michigan state.
Perhaps the biggest reason for Michigan sales dip for marijuana is home growers’ tendency to develop their products. As the state eases home growing laws for marijuana, there has been a growing trend to grow weed inside homes.
In 2018, the state allowed home growers to grow up to 12 plants per home. However, these plants were strictly for recreational purposes only.
The owner of Michigan Marijuana Seed Club, Pete O’Toole, believes that the home growers have taken over the industry. He believes that his seed business has seen new highs in the last two years, with the significant consumers being home growers.
By the end of 2021, Pete expects the sales profit to hit $500,000.
Michigan’s mysterious case of sales dip in weed leaves weed growers with some important lessons. As the state eased the home growing laws two years ago, it allowed the people to explore the plant.
Moreover, it indicates how Michiganders prioritize quality over everything as they opted to leave the licensed market because of a lack of quality products. Furthermore, the COVID-19 showed its impacts on sales, cutting down significant deals because of job losses.
Moreover, unlicensed growers continue to play their role in bringing down the sales, which calls for the state to take action if marijuana sales are to be reinforced.