Michigan’s Green Boom: Report From The Second-Largest Cannabis Market In The U.S. – Cresco Labs (OTC:CRLBF), Ascend Wellness Holdings (OTC:AAWH)


Michigan’s Cannabis Market: A Growing and Competitive Landscape

In the realm of cannabis, Michigan has swiftly climbed the ranks to become one of the largest markets in the United States. With only California ahead of it, Michigan has established itself as a highly competitive landscape with over 2,100 active adult-use licenses, including 1,050 grower and 734 retailer licenses.

The growth and maturity of Michigan’s cannabis market can be observed through its impressive sales figures. Since June 2023, the state’s adult-use market has generated over $250 million in sales monthly, solidifying its position as a major player in the industry.

One significant shift in consumer behavior within Michigan’s cannabis market is the move towards legal purchases. The availability of a wide variety of products at lower prices has attracted consumers to the legal market. According to Madeline Scanlon, cannabis insights manager at Brightfield Group, the decrease in the retail price of an ounce of flower to under $200 in late 2021 led to a significant increase in legal recreational market purchases. As of Q3 2023, with the price averaging $100 per ounce, 75% of consumers now shop at recreational dispensaries. This shift has also resulted in a decline in purchases through the illegal market, dropping from 50% to 37% over the same period.

Demographic insights further shed light on Michigan’s cannabis consumers. The majority of adult-use consumers in the state are female (56%), with a significant portion belonging to the Gen X or Baby Boomer generations (40%). Preferred products include flower (69%), pre-rolls (67%), and gummies. Interestingly, despite the low prices, 80% of recreational shoppers prioritize price over taste, effect, or dosage.

The competitive landscape in Michigan’s cannabis market is diverse and robust. Local brands, such as Lume Cannabis Co., offer a wide range of products, while multistate operators (MSOs) like PharmaCann, Ascend Wellness Holdings Inc (AAWH), and Cresco Labs Inc (CRLBF) intensify the competition with their extensive product suites. The market has seen a significant influx of investment, with a total of $6.4 billion spent on recreational cannabis since December 2019.

The impact of Michigan’s cannabis market extends beyond its economic growth. With 23% of the state’s residents purchasing cannabis in the last three months, surpassing the national average, the market has contributed to the normalization of cannabis consumption. This normalization, coupled with increased government revenue from taxes, creates a favorable environment for the emergence of innovations in the industry.

Michigan’s cannabis market has rapidly evolved into a powerhouse within the industry, rivaling even the largest markets in the country. With its competitive landscape, diverse product offerings, and a consumer base that continues to grow, Michigan is poised to make a lasting impact on the cannabis industry.

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