Michigan's cannabis market has hit rock bottom, with a shrinking industry on the brink of collapse. Since recreational sales began in December 2019, prices have plummeted, resulting in over 550 dispensaries and cultivators shutting down, and thousands of employees losing their jobs. The latest data shows that adult-use dispensaries raked in $3.17 billion in sales in 2025, a decline of 3.1% from the previous year.
The market's woes are largely attributed to an oversaturated supply. With prices falling and competition increasing, many businesses are struggling to stay afloat. The industry has generated $13.23 billion in purchases and $2.2 billion in state and excise taxes since recreational sales began, but those figures are expected to continue falling this year.
The new 24% wholesale tax imposed by Governor Gretchen Whitmer is expected to further exacerbate the problem. The tax will shrink the wholesale market by 14%, according to estimates, which could lead to a significant decline in excise and sales tax revenue. Small businesses and independent operators are particularly vulnerable to the impact of the tax, as larger corporate retailers will be better equipped to absorb the costs.
"Most entrepreneurs are in it for the money," says Stuart Carter, owner of Utopia Gardens dispensary and cultivation facility. "They're not used to this kind of financial stress."
The tax has already taken a toll on the industry, with sales at some dispensaries slowing dramatically. Growers are feeling the pressure most, with 191 operations closing since the industry began.
"The multi-chain operators are in the best position to weather this because they are buying in bulk and they can diffuse losses at some of their stores," Carter says. "It's the smaller entrepreneurs who are going to be the most affected."
Legislators have introduced a bill to limit competition, hoping to reduce oversupply. However, this move threatens smaller cities like Hazel Park and Ferndale, which rely heavily on cannabis revenue.
For now, dispensaries, growers, processors, and other businesses will have to find a way to adapt. As one business owner says, "We want to have a sustainable Michigan business that gives back to the customers... but with these changes, it will be difficult to navigate these waters."
The market's woes are largely attributed to an oversaturated supply. With prices falling and competition increasing, many businesses are struggling to stay afloat. The industry has generated $13.23 billion in purchases and $2.2 billion in state and excise taxes since recreational sales began, but those figures are expected to continue falling this year.
The new 24% wholesale tax imposed by Governor Gretchen Whitmer is expected to further exacerbate the problem. The tax will shrink the wholesale market by 14%, according to estimates, which could lead to a significant decline in excise and sales tax revenue. Small businesses and independent operators are particularly vulnerable to the impact of the tax, as larger corporate retailers will be better equipped to absorb the costs.
"Most entrepreneurs are in it for the money," says Stuart Carter, owner of Utopia Gardens dispensary and cultivation facility. "They're not used to this kind of financial stress."
The tax has already taken a toll on the industry, with sales at some dispensaries slowing dramatically. Growers are feeling the pressure most, with 191 operations closing since the industry began.
"The multi-chain operators are in the best position to weather this because they are buying in bulk and they can diffuse losses at some of their stores," Carter says. "It's the smaller entrepreneurs who are going to be the most affected."
Legislators have introduced a bill to limit competition, hoping to reduce oversupply. However, this move threatens smaller cities like Hazel Park and Ferndale, which rely heavily on cannabis revenue.
For now, dispensaries, growers, processors, and other businesses will have to find a way to adapt. As one business owner says, "We want to have a sustainable Michigan business that gives back to the customers... but with these changes, it will be difficult to navigate these waters."
like they went from 700 million to 3 billion drop 
and now everyone's struggling big time 
got 550 dispensaries closed already and thousands losing jobs 
. And it's not just that, they're introducing this new tax which is gonna hurt small businesses even more 
. like what were they thinking? 
should've thought of this before 
anyway...
anyway, i think the gov should help the small businesses instead of making it harder for them to stay open. maybe they could have some kinda loan program or somethin' 
. The 24% wholesale tax is just not fair, you know? It's like, they're already working hard to produce quality product and now they're being hit with this huge tax that's gonna make it super hard for them to compete.
. It's like, can't we find a way to make everyone happy and sustainable at the same time?
. Maybe they just need some support or resources to help them navigate this new landscape? Just sayin' 
that's a recipe for disaster even the big corporate retailers might struggle with that kind of hike small businesses are already on shaky ground here what they need is some help not more taxes or regulations 
. The wholesale tax of 24% 
is a huge blow to small businesses 
.
. Maybe some creative solutions can come from it? 
. It's tough to see entrepreneurs like Stuart Carter struggling to make ends meet. The thing is, he's not the only one – thousands of employees are losing their jobs too 
.
. And now, it looks like some of them might have to shut down for good 
.
. Some of these small businesses are resilient, and they'll find a way to adapt... maybe they can even innovate and come up with new ways to stay competitive 
.
. I mean, who wouldn't want to spend their days surrounded by vape shops and smoke joints? Not me, that's for sure. And with prices plummeting, it's like they're trying to make us all work harder to get our daily fix...just kidding (or am I? 
). Seriously though, 550 dispensaries shutting down is just wild – I hope those employees are getting some solid COBRA coverage 
. Now, we're paying the price with all these closures and job losses 
. These small businesses are already struggling, and now they're going to get hit with an even bigger tax bill? It's just not fair 
.
. I get it, the state needs revenue, but 24% is steep, even for a newbie like me 
. It's gonna hit those small businesses hard, especially in smaller cities like Hazel Park and Ferndale that are already feeling the pinch 
and thats because of that new 24% wholesale tax 
that's thousands of employees losing their jobs 
it's just so sad 
i dont think this is the best solution at all 
michigan's cannabis market is literally tanking?? like what happened? 
small businesses and independent operators are gonna be hit hard, for sure 
. It's all about finding that balance, you know?