Michigan’s Cannabis Market Achieves Record-Breaking $3 Billion in Sales for 2023: A Triumph of Growth and Social Equity

Michigan's legal marijuana market experienced a remarkable surge in 2023, as retailers in the state raked in over $3 billion in cannabis sales, marking a substantial increase from the previous year's total of $2.29 billion. December proved to be a standout month, with licensed businesses recording a historic high of $279.9 million in total sales—a new record that surpassed the previous peak set in July at $276.7 million.

Recreational sales dominated the market throughout the year, overshadowing medical marijuana transactions as the months progressed. In December, adult-use retailers accounted for a staggering 99 percent of all legal cannabis sales, amounting to $276.7 million. In contrast, medical marijuana dispensaries contributed a mere 1 percent to the market, with monthly sales totaling $3.2 million.

The annual sales figure for 2023, encompassing both adult-use and medical purchases, reached $3,057,161,285.85—a substantial increase of about a third compared to 2022's total. This equates to roughly $305 worth of marijuana for every person in the state, a figure that surpasses the gross domestic product of 51 nations.

State officials noted in November that tax revenue from legal marijuana experienced a 49 percent growth compared to the previous year, outpacing revenue generated from alcohol sales. The marijuana sales tax, set at 10 percent—among the lowest rates nationally—combined with a 6 percent state sales tax, contributed significantly to the state's coffers. In October 2023 alone, the marijuana excise tax generated $52.4 million in revenue, exceeding other sources aside from key taxes.

The market's potential for continued growth is evident, as monthly sales have not yet reached the plateau often observed in more mature state marijuana programs. Michigan's annual marijuana sales still fall slightly below some market analysts' predictions of a peak between $3.1 billion and $3.2 billion.

Michigan voters embraced adult-use marijuana legalization in 2018, leading to legal sales commencing the following year. In December 2023, adult consumers predominantly spent their money on flower, accounting for approximately 45 percent of total monthly sales. Other popular purchases included vape cartridges (19 percent), inhalable concentrates (11 percent), edibles (10 percent), shake and trim (8 percent), and various other product types.

The state's commitment to social equity in the cannabis industry is evident through the launch of a social equity grant program. This program awards $1 million to eligible marijuana businesses for education, business needs, or community reinvestment. The aim is to support those who have been disproportionately impacted by cannabis prohibition, fostering growth in their businesses and contributions to their communities.

Despite the impressive sales figures, the average cost of marijuana in Michigan has remained at record lows, with the price of an ounce for adult-use cannabis hovering around $98. This is a considerable drop from December 2021 when an ounce cost approximately $180.

Michigan's legal cannabis landscape has seen additional positive developments, including the end of pre-employment marijuana testing for most government employees, effective October 2023. Furthermore, a legislative change in October allowed state-licensed marijuana businesses to engage in trade with tribal cannabis entities.

In the realm of drug policy reform, a bill introduced in September aimed to legalize psychedelic plants and fungi, with a focus on activities conducted “without receiving money or other valuable consideration.” Michigan lawmakers also urged the U.S. Congress, Department of Defense, and Department of Veterans Affairs to prioritize research and investment in non-technology treatment options, including psychedelics, for addressing psychological trauma resulting from military service.

Lastly, Ypsilanti became the fifth Michigan city to pass a resolution deprioritizing the enforcement of laws against psychedelic substances while expressing support for a statewide bill to legalize certain entheogenic plants and fungi. Overall, Michigan's cannabis landscape continues to evolve dynamically, signaling a positive trajectory for both the industry and drug policy reform.

This story was originally covered by Marijuana Moment.