Why did the Michigan adult-use market get off to such a rocky start? Just how big is the Michigan adult-use cannabis market now? Will Michigan stay in the top ten adult use markets or will it be bumped out by New York and New Jersey? BDSA has expanded its retail sales tracking service with category-level sales for Michigan and we’ve isolated some crucial insights about what has shaped this market and how it will continue to develop.
First, the back story…
Medical cannabis has been legal in Michigan since 2008. The initial medical law was based on a caregiver system and did not explicitly allow for retail. An extensive grey market developed. The state was home to hundreds of dispensaries by 2016, when Governor Rick Snyder signed a package of bills to license dispensaries and bring the medical market under tighter regulation.
The transition to a regulated market began in 2018, and the move away from the lax caregiver model caused significant disruptions, with product shortages and other issues leading to sluggish sales in 2019, when medical sales totaled $633 million. But Michigan seems to have shaken its growing pains–the market brought in almost $1 billion in total legal sales in 2020.
Shifting consumer attitudes show great potential for adult use in Michigan…
BDSA’s Consumer Insights data shows a rapidly growing consumer base in Michigan. In the fall of 2018, twenty-four percent of survey respondents reported consuming cannabis in the past six-months, while thirty-six percent stated that they were not open to consuming cannabis. By the fall of 2020, the share of consumers had shot up to thirty-nine percent, while those reporting that they were not open to cannabis consumption fell to thirty percent.
By contrast, thirty-six percent of Colorado respondents in fall of 2018 reported past 6-month consumption, a share that grew to a whopping forty-eight percent by fall of 2020. This suggests that Michigan’s consumer share could grow substantially as adult use becomes more established and non-consumers warm to the idea of cannabis consumption.
Will Michigan remain in the top ten?
With a 21+ population of over seven million, Michigan ranked as the seventh largest legal market in 2020, riding its sales boost from the launch of adult-use to the top-10 list. In the next few years, the market will be overtaken by more populous states such as Florida, New York, and New Jersey, but Michigan is still expected to be the ninth-largest legal market in 2026.