Michigan Cannabis Prices: ...-Year Trends

Abstract

Michigan’s regulated Cannabis system has drifted into a structural contradiction: it is written as two markets, but it behaves like one. This analysis shows how the state’s Medical and Adult-Use sectors have merged into a de facto unified supply chain through sustained regulatory arbitrage, with medical licenses—cheaper and easier to obtain—serving as a low-cost production tier that feeds the adult-use market via formal conversion pathways. As medical retail demand contracts, cultivation volumes remain disproportionately high, generating surplus biomass that keeps downward pressure on adult-use pricing and challenges operators who are simply trying to keep their businesses alive. These pressures now interact with a third competitor—the untracked illicit market—creating three parallel supply chains operating under different regulatory rules but competing for the same consumers.

Introduction

Twenty-one U.S. states now operate dual-market cannabis systems with separate medical and adult-use programs. While these markets are written as distinct regulatory frameworks, recent evidence suggests they often function as unified supply chains. Colby et al. (2023) documented medical program declines of 22-55% in Colorado and Oregon following adult-use implementation, while Xing and Shi (2024) found that illicit markets remain "sizable or even larger" than legal markets in recreational states, competing primarily on price. These studies document what happens when dual markets coexist but do not explain the structural mechanisms driving market convergence.

Michigan exemplifies this pattern. Fisher (2025) showed that Michigan's medical market contracted 96% after adult-use sales began, while flower prices collapsed from over $400 per ounce (2020) to $69 (2024) (Figure 2). This analysis examines the regulatory structure underlying these dynamics, specifically how medical licenses function as low-cost production tiers feeding the adult-use market through formal conversion pathways. The result is a system written as two markets that behaves as one, creating sustained pricing pressure and three-way competition between medical, adult-use, and illicit supply chains.

Methods

Data Sources

All data were obtained from the Michigan Cannabis Regulatory Agency's (CRA) publicly available licensing and statistical reports. The dataset comprises a ...-month longitudinal record (October 2019–Present), capturing monthly aggregated information on sales volumes, pricing, regulatory fees, license counts, and production metrics for both medical and adult-use Cannabis sectors. All analyses and visualizations are provided in a single self-contained HTML file. Michigan’s reporting is an anomaly. Unlike peer markets that mask dynamics behind opaque aggregate totals or lock data within restrictive visualization dashboards, Michigan provides a level of granularity that makes this depth of structural analysis impossible to replicate elsewhere.

Data Extraction & Processing

Initial evaluation (2023–2024) tested Power BI and Tableau for viability. Both platforms handled the dataset structurally but failed to meet longitudinal research requirements. Frequent interface redesigns, dependency churn, slow refresh cycles, and inconsistent export behavior undermined reproducibility. DAX-based transformations imposed ongoing maintenance overhead, while navigation model changes disrupted established workflows mid-project. These instabilities necessitated a minimal-dependency HTML/JavaScript architecture offering stable rendering, transparent version control, and archival persistence suitable for a DOI-linked publication.

Due to significant formatting inconsistencies in historical CRA PDF reports over the ...-year period, automated extraction methods (including OCR and AI-driven parsing) were rejected as unreliable. To ensure absolute data fidelity, the entire ...-month dataset was manually transcribed and compiled directly from source documents.

The data pipeline utilized a verified workflow:

• Manual Transcription: Raw data was transcribed to XLS format to verify numerical precision against source totals.
• Conversion Pipeline: Data was converted from XLS to CSV and ultimately serialized into JSON for web integration.
• Validation Tooling: A suite of custom local utilities was developed to validate JSON schemas, minify payloads, perform array conversions, and generate sitemaps.
• Integrity Checks: Percentage calculators were employed to cross-reference graphs and cards against raw values, ensuring no statistical imputation or adjustment was applied to the primary dataset.
• Quality Assurance: Randomized manual audits were conducted throughout the project, cross-referencing serialized JSON outputs against the original source PDFs to maintain data accuracy.

Web Architecture & Performance

The visualization interface was developed using a monolithic, "evergreen" architecture designed for long-term stability and archival resilience. Comparative benchmarking of reactive frameworks (Vue.js, React.js, Angular) versus native JavaScript (Vanilla JS) demonstrated that a framework-agnostic approach yielded superior runtime performance for the project's specific high-density data visualization requirements.

This structure allows the document to nearly write itself. A single manual data update triggers the browser to regenerate the text and figures simultaneously. Effectively, the file has evolved from a static webpage into a standalone application. Consequently, the entire analysis is immediately replicable by any researcher simply by saving this HTML file locally; no server-side dependencies are required.

To maximize rendering speed and eliminate dependency "rot," the architecture utilizes:

• Monolithic Delivery: The complete ...-month dataset is embedded directly as a pre-hydrated JSON object within the DOM, eliminating asynchronous fetch requests and loading states.
• Minimal Dependencies: The system operates with only a single external CDN dependency, ensuring the codebase remains lightweight and immune to the obsolescence often associated with complex framework ecosystems.
• Inline Critical Path: Styling is delivered via inline CSS to prevent render-blocking resources.
• Performance Metrics: This streamlined approach resulted in Google PageSpeed Insights scores on the latest build of 99, 100, 100, 100 across Performance, Accessibility, Best Practices, and SEO categories.

To ensure long-term discoverability, interoperability, and reproducibility, the HTML document embeds a complete schema.org/Dataset JSON-LD block containing the DOI, version identifier, author ORCID, publisher metadata, spatial coverage, Creative Commons Attribution 4.0 licensing, and persistent dataset identifiers. This approach supports FAIR principles by enabling machine-readable indexing across search engines, academic aggregators, and semantic-web systems. All metadata is stored inline with the visualization framework, ensuring that the published DOI-linked artifact remains self-describing and platform-independent over time.

Analytical Approach

• Temporal Coverage: Complete longitudinal analysis spanning market initiation to the present.
• Price Analysis: Mean price calculations per ounce and gram for both medical and adult-use sectors.
• Market Segmentation: Discrete tracking of flower, concentrate, edible, vape, and shake product categories.
• Production Tracking: Plant harvest counts and product volumes measured in pounds.

Results

Market Inversion and Volume Displacement

The market has undergone a complete inversion of sector dominance. In the initial phase of adult-use implementation (2019–2020), medical sales provided the revenue baseline. However, as adult-use access expanded, it did not merely supplement the medical market but actively cannibalized it (Figure 1). While total market capitalization has continued to rise, this growth is now driven exclusively by adult-use volume, effectively rendering the medical retail sector obsolete.

Price Compression and Convergence

Pricing dynamics illustrate a rapid race to the bottom. Early market data shows a distinct premium for adult-use products, with prices exceeding $500 per ounce during the initial supply constraint. Over the observed period, this premium evaporated. The data now shows a near-total convergence of medical and adult-use pricing curves (Figure 2), confirming that the two sectors have functionally merged into a single commoditized market where price elasticity dictates consumer behavior.

The Production Disconnect

A critical asymmetry appears in the licensing data. While medical retail activity collapsed (Figure 7), medical cultivation infrastructure did not contract at the same rate. The surge in Class C medical grow licenses (Figure 5) created a production capacity that far exceeded the needs of the shrinking medical patient base. This structural overhang is visible in harvest metrics (Figure 4), where seasonal outdoor medical harvests continue to inject massive biomass volumes into the supply chain, feeding the adult-use market through the conversion loophole.

Divergence Between Narrative and Data

Michigan’s regulated Cannabis market has exhibited trends over the past ... years that diverge from standard agricultural ramp-up models. While retail prices have compressed significantly (Figure 2), production metrics have remained at persistently high levels despite the evaporation of wholesale margins. This anomaly suggests the market is not being driven solely by organic supply and demand, but by distinct phases of administrative engineering.

Phase 1: Supply Chain Initialization (The "Seed" Era)

The market launched in December 2019 with a supply paradox: retail sales volumes immediately exceeded the physical harvest capacity of the licensed infrastructure. This gap was bridged by a state-sanctioned intake of existing unregulated inventory. From December 2019 through September 2020, the Marijuana Regulatory Agency (MRA) permitted licensed growers and processors to purchase biomass directly from registered Caregivers (Michigan Marijuana Regulatory Agency, 2020a).

Crucially, the phase-out rules mandated that much of this external biomass be processed rather than sold as raw flower. This created a distinct statistical anomaly in early market data: a high volume of available Concentrate and Vape inventory relative to Flower. Since concentrate cannot be "harvested" directly, this initial stock confirms that the regulated market was effectively capitalized by the gray market, converting "basement" biomass into licensed, taxable inventory to prevent a retail supply collapse during the infrastructure build-out.

Phase 2: Structural Arbitrage (The "Floodgate" Era)

As licensed infrastructure matured, the supply mechanism shifted from external injection to internal regulatory arbitrage. A primary observation is the functional integration of the medical and adult-use sectors. Although medical retail activity has contracted sharply (Figure 7), medical cultivation yields remain substantial—over ... plants in ... alone (Figure 4).

This discrepancy is driven by a stark economic incentive. Historically, a Class C Medical license carries an annual state fee of approximately $4,500 (plus municipal costs), whereas the equivalent Adult-Use Class C license commands a fee of $24,000 (Michigan Cannabis Regulatory Agency, 2023b). For an operator holding multiple licenses, this differential creates a massive overhead reduction if production is centered on the medical side.

The mechanism for moving this product is an administrative pathway permitted by the regulations. While earlier rules limited these transfers to 50% of inventory monthly, the CRA's February 8, 2023 Advisory Bulletin explicitly removed these quantity limits. This effectively opened a floodgate, allowing operators to migrate 100% of their lower-cost Medical inventory into the Adult-Use supply chain instantly (Michigan Cannabis Regulatory Agency, 2023a).

Crucially, this transfer mechanism functions as a risk-mitigation strategy against testing failures. Medical compliance enforces stringent microbial limits (10,000 CFU/g for yeast and mold) compared to the looser Adult-Use standard (100,000 CFU/g). The February 2023 Bulletin explicitly outlines a protocol for re-designating medical batches that fail for yeast and mold as "passing" within the Adult-Use system. By migrating inventory to the Adult-Use supply chain, operators bypass stricter biological constraints, monetizing biomass that would otherwise be destroyed (Hinkley, 2025; Walsh, 2025). The state, in turn, captures the 10% excise tax that would be lost if the product remained in the untaxed medical sector.

Fixed Costs and Production Inelasticity

Indoor cultivators face distinct economic pressures. High fixed costs associated with energy, climate control, and facility maintenance create substantial overhead. In a declining price environment, the theoretical response would be to reduce output. However, because fixed costs remain constant regardless of production level, reducing output often increases the cost per unit, creating a disincentive to scale back. Operators are therefore incentivized to maintain or even increase throughput to amortize these costs, a trend visible in the sustained rise of Class C licensure (Figure 5).

Conclusion

The Michigan Cannabis market presents a notable paradox: sales volume continues to grow even as prices decline. Lower prices have broadened market access and brought in new consumers, which represents genuine progress. However, this shift also signals an important transition. The initial growth phase has concluded, and the market is maturing; sustainable success increasingly depends on operational efficiency, strategic positioning, and adapting to a more competitive, price-sensitive landscape.

This assessment depends exclusively on documented transactions within the regulated framework. However, the parallel illicit market works in the shadows as an invisible competitor, keeping no public ledger — a wicked-curveball that inevitably influences legal pricing and supply in ways official metrics cannot fully capture.

The market requires balance. Future work should examine what policies, mechanisms, and business strategies can address this imbalance. The market is unlikely to stabilize until the regulatory distinction between supply chains is reconciled with the economic reality of a unified consumer base.

References & Data Sources