The Michigan marijuana market faces an unprecedented crisis as oversupply, plummeting prices, and razor-thin profit margins force once-thriving cannabis businesses to scale back operations or shut down entirely. When Greenhouse of Walled Lake opened in 2019, business was booming as it catered to Michigan’s medical marijuana clientele. However, the landscape has dramatically shifted since recreational marijuana sales began later that year statewide.

“We’re oversaturated,” said Jerry Millen, owner of Greenhouse. “Too much product, too many stores to the point where people are just giving the product away.”

Indeed, the most notable recent retreat from the Michigan marijuana market came in late June when Canadian cannabis giant TerrAscend announced its “strategic exit” from the state. The publicly traded corporation declared its intention to sell or divest all its assets in Michigan, which include four growing facilities, 20 dispensaries, and real estate holdings.

Sales Figures Tell a Troubling Story

According to Michigan’s Cannabis Regulatory Agency, both medical and adult-use recreational marijuana sales declined in June 2025 from the previous month. Specifically, medical sales fell 12%, from $553,315 in May to $487,087 in June. Meanwhile, adult-use sales dropped 4.2%, from $272.1 million to $260.6 million for the same period.

For the first six months of 2025, total cannabis sales reached $1.58 billion, down $10.4 million, or 0.7%, from the same period in 2024. Moreover, medical sales dropped sharply, falling 72% from $12.7 million in the first half of 2024 to just $3.5 million in 2025.

The college town of Ann Arbor exemplifies the struggles facing the Michigan marijuana market. Dispensaries Arbors Wellness, Leaf and Bud, and Misty Mountain have all recently closed their doors. Additionally, TerrAscend’s Cookies location in Ann Arbor is set to close on 31 August, according to a front desk worker.

Understanding the Market Collapse

A slowdown in sales stems from several converging factors, said Aidan Bergsman, data scientist and senior analyst for Anderson Economic Group. Cannabis sales in Michigan began to plateau around August 2024, coinciding with the launch of Ohio’s recreational market.

“You had a lot of Ohio residents crossing over to Michigan, especially for adult-use products,” Bergsman explained. “When Ohio legalised and implemented their programme, that cross-border activity decreased, and that definitely shows up in Michigan’s numbers.”

Furthermore, there’s a shift from traditional retail outlets towards home cultivation and obtaining cannabis from friends or family, he noted. Some consumers may also be choosing between marijuana and alcoholic beverages due to limited budgets. “Consumers only have so much that they’re spending on these types of products,” Bergsman said.

The Price War Destroying Profits

What remains in the Michigan marijuana market are too many businesses competing for too few customers. Consequently, some companies feel pressure to reduce prices or sell inferior products, said Greenhouse’s Millen. That approach proves unsustainable in the long term.

Nick Hannawa, vice president and part-owner of Puff Cannabis, said prices have dropped significantly, allowing customers to buy much more for the same amount of money compared to a few years ago. “One vape purchase back in 2019, let’s say, it was $50,” he explained. “Today, that same vape cartridge, you can get six of them for $50.”

The pricing collapse affects the entire supply chain. “The decline in pricing not only impacts retailers,” Hannawa said, “but it also affects growers and processors because they’re forced to sell their products for cheap.”

Millen said revenue at his store has fallen about 50% so far, with profits down approximately 70% over a two-year period. He’s maintained his business thanks to a loyal customer base. “I’m just glad that we’re profitable,” he stated. “Because 90% of these people in Michigan right now, I guarantee you are not profitable.”

TerrAscend’s Exit Sends Warning Signal

TerrAscend said its exit from the Michigan marijuana market would likely be completed by the “second half of 2025.” The withdrawal comes with a 21% downsizing of the firm’s 1,200-person workforce. Executive Chairman Jason Wild stated: “Michigan is an extremely difficult market and we have to come to the realisation that our resources can be better utilised in other markets.”

Several TerrAscend dispensaries are preparing to close across Metro Detroit. An employee at Cookies in Oxford said the store’s last day was 30 July. Similarly, staff at Lemonnade in Center Line and Gage Cannabis in Adrian said their locations will close on 31 August.

Departures like TerrAscend’s damage Michigan’s image, Hannawa said. “For this big publicly traded company to come in and do this and then have to exit out of the market, it’s not a good look for us. It doesn’t put the Michigan market in a good light, because it’s showing that it’s weak, because these guys are leaving.”

A National Pattern Emerges

Kevin Sabet, director of the advocacy organisation Smart Approaches to Marijuana, said the retreat from the Michigan marijuana market by cannabis giants reflects a consistent national trend. General oversaturation of the country’s marijuana market causes similar pullbacks in other states previously seen as gold mines for legal cannabis sellers, like California.

Part of the issue proves inherent to the plant itself, he explained. The marijuana market is “very difficult” because the plant “grows everywhere.” “That’s why it’s called ‘weed,'” Sabet noted.

Another challenge involves competition with black-market sellers, who don’t face regulatory burdens like licensing and taxes. Those illegal sellers include criminal enterprises based in foreign countries like Mexico, Colombia, and China that run illegal “grow operations” in the United States and traffic the product domestically.

“So if you were going to be able to have illegal entities undercut the taxed, legal product, you were going to have a successful business on the illegal side,” Sabet said.

Sabet, who served as a drug policy adviser to three U.S. presidents, said he and others could see the marijuana industry’s woes coming from a “mile away.” “We’ve never regulated something dangerous very well in this country,” he emphasised.

Industry Calls for Intervention

As challenges continue, Michigan’s cannabis business owners have proposed several ideas for stabilising the market. Hannawa wants to see the state act to stabilise the Michigan marijuana market through price increases so businesses can remain profitable and a halt to new licenses.

“Giving out more licenses in Michigan doesn’t make any sense anymore,” he said. “We have enough processors. We have enough growers.”

Millen advocates for federal legalisation, which would result in tax savings for marijuana businesses. He also believes there should be fewer licences and stores, with support for knowledgeable local businesses rather than corporate operators.

“The lawmakers need to sit down with people like myself and other good players for this industry, and talk to us about what needs to change,” Millen urged.

The Unsustainable Future

Millen has a stark prediction for the future. “Everybody’s waiting for the big break. What’s the big break? The big break is going to be when half the businesses go out, unfortunately. And it’s going to happen.”

Vendors constantly approach him to carry their products, he said. “I feel terrible that I can’t buy it. Because if I can’t sell it, I can’t buy it.”

For consumers, Millen offers this advice: “Find out who and where you’re buying your cannabis from and what they stand for. If you truly believe in what you’re buying, you should know that you’re buying from good people.”

As the Michigan marijuana market continues contracting, the broader implications for public health, community safety, and economic stability remain uncertain. What seems clear, however, is that the initial promise of a booming industry has given way to a harsh reality of oversupply, unsustainable pricing, and mounting business failures.

Source: Chicago Tribune