Zahra Ahmad of Bridge Magazine reports that not everyone is happy that Michigan’s marijuana prices hit all-time lows in January:
Record marijuana supply is driving down prices so much customers are buying it at record rates. There’s 55 times more pot on the market and people are purchasing it at 16 times the rate since marijuana hit the market two years ago, state records show.
Prices are now lower than they were 30 or 40 years ago when pot was illegal: The average price for an ounce, 28 grams, fell 70 percent to $152 in January from $516 in December 2019.
Some dispensaries in Kalamazoo are selling an ounce for as low as $50, while the average price for a gram in Michigan is $5, less than half the national average.
“The buzzword right now about the market is growth, but I think we’re entering a stage where the prices and supply are meeting demand and it’s stabilizing,” said Andrew Brisbo, executive director of the Michigan Marijuana Regulatory Agency.
In all, Michigan has grown rapidly to become the fourth-largest marijuana market in the nation, with $1.8 billion in sales in 2021.
…Justin Palmatier, who owns Lake Effect and Doja dispensaries in Portage, said retailers were able to buy marijuana at low prices and increase sales. When his dispensary dropped its price per gram to $5, competitors quickly matched it.
When Lake Effect began selling an ounce for $100, or 28 grams, some competitors dropped their price to $75, Palmatier said.
“If a local competitor were to drop their prices, we have to match or beat them,” Palmatier said. “When prices drop, we start racing to the bottom.”
Brisbo said he’s not sure when the retail price will bottom out. Until prices start increasing, some growers say they’re struggling to make a profit.
Large marijuana growing operations are opening more regularly, squeezing out smaller operations, said Chris Krestchmer, general manager at Homegrown Cannabis Company in Lansing, which grows marijuana for wholesale and sells it at retail.
Read on for more in Bridge.