Michigan is seven months into its legal recreational cannabis market, which appears to be growing at a colossal rate. The initial month of sales – last December – totaled $7 million. Comparatively, sales in May 2020 soared to $39 million.

Estimates from the Marijuana Business Factbook pinned Michigan’s adult-use cannabis sales in the range of $400 million to $475 million this year. By 2024, revenue is expected to surge further to $1.9 billion-$2.4 billion. 

Although forecasts for Michigan’s adult-use cannabis market are promising, to say the least, obstacles remain. For example, a meager amount of municipalities have opted in to allow recreational cannabis in their respective regions, which could create a problem in regards to supply and demand.

Adult-use demand is constricting supply of cannabis in Michigan

The long road to legal weed in Michigan meant that an influx of consumers descended on licensed stores once sales went live at the end of 2019. As a direct effect of sudden demand, supply shortages have been a growing concern for the market. Consequently, the cost of cannabis flower in Michigan’s recreational market has remained fairly high.

A recent monthly report published by Michigan’s Marijuana Regulatory Agency (MRA) revealed that the average retail price for an ounce of adult-use cannabis was $410 this May. Conversely, the average per-ounce price in the medical market rested at around $251.

According to the owner of pot producer Truu Cannabis, Kevin Pybus, the adult-use sector’s dry supply issues have not been apparent in the medical cannabis market.

“You might see 20 or 25 strains on the medical side, and then go over to the rec side and there might only be four strains of cannabis,” he said, adding that supply issues are a problem for consumers who are seeking out “gummies, distillate, all of it.”

1,419 communities opted out of licensed stores for recreational cannabis in Michigan

Municipal opt-ins for Michigan’s adult-use market have been hindered by the coronavirus (COVID-19) pandemic, which has forced cannabis store operators in various U.S. states to conduct social distancing measures in their daily operations. Nonetheless, Robin Schneider of the Michigan Cannabis Industry Association recently told reporters that he was beginning to notice an “uptick” once again.

A deadline of November 2019 was given to local governments, who were able to either opt-in or opt-out of permitting cannabis business activities within their communities. Failure to decide by the deadline meant that a local government would automatically be forced to opt-in. 

Recent figures released by Michigan’s MRA indicated that 1,419 communities opted out of recreational cannabis stores opening their doors; significantly more than the 60 that decided to partake in the legal weed industry. An additional 145 communities have already opted in for medical cannabis businesses in Michigan.