Michigan's cannabis market is facing a bleak future as a new tax threatens to shrink the industry further. The state's recreational market saw its first decline in annual sales last year, with adult-use dispensaries generating $3.17 billion in revenue in 2025, down from $3.27 billion in 2024.
The decline is attributed to an oversaturated supply and declining prices, which has led to over 550 dispensaries and cultivators closing their doors since recreational cannabis sales began in December 2019. Thousands of employees have also been laid off, leaving many wondering how the industry will recover.
A new tax on wholesale cannabis is expected to exacerbate the problem, with a 24% levy scheduled to take effect this year. The state estimates that the tax will shrink the wholesale market by 14%, which could lead to further closures and layoffs.
Industry insiders are warning of an impending "bloodbath" as corporate retailers and large-scale growers capitalize on the struggles of smaller operators. Many are already reporting slow sales and a lack of customers, with some attributing the decline to consumers mistakenly believing they will have to pay the new tax.
Growers, who are feeling the pressure the most, are bracing for a tough year ahead. Michigan currently has 430 active grow operations, but 191 have closed since the industry began. The state is also expected to lose millions in excise and sales taxes due to the wholesale tax.
Business owners and regulators are at odds over the impact of the new legislation, which would limit competition in hopes of reducing oversupply. While some see it as a necessary measure, others argue that it will harm small cities and communities that rely on cannabis revenue.
As the industry teeters on the brink of collapse, many are worried about the future of cannabis workers and local budgets that depend on cannabis tax revenue. The state is expected to lose millions in excise and sales taxes due to the wholesale tax, which could have long-lasting implications for Michigan's economy.
With the industry in crisis mode, it remains to be seen how businesses will adapt to the new tax and changing landscape. One thing is clear, however: the future of Michigan's cannabis market looks bleaker by the day.
The decline is attributed to an oversaturated supply and declining prices, which has led to over 550 dispensaries and cultivators closing their doors since recreational cannabis sales began in December 2019. Thousands of employees have also been laid off, leaving many wondering how the industry will recover.
A new tax on wholesale cannabis is expected to exacerbate the problem, with a 24% levy scheduled to take effect this year. The state estimates that the tax will shrink the wholesale market by 14%, which could lead to further closures and layoffs.
Industry insiders are warning of an impending "bloodbath" as corporate retailers and large-scale growers capitalize on the struggles of smaller operators. Many are already reporting slow sales and a lack of customers, with some attributing the decline to consumers mistakenly believing they will have to pay the new tax.
Growers, who are feeling the pressure the most, are bracing for a tough year ahead. Michigan currently has 430 active grow operations, but 191 have closed since the industry began. The state is also expected to lose millions in excise and sales taxes due to the wholesale tax.
Business owners and regulators are at odds over the impact of the new legislation, which would limit competition in hopes of reducing oversupply. While some see it as a necessary measure, others argue that it will harm small cities and communities that rely on cannabis revenue.
As the industry teeters on the brink of collapse, many are worried about the future of cannabis workers and local budgets that depend on cannabis tax revenue. The state is expected to lose millions in excise and sales taxes due to the wholesale tax, which could have long-lasting implications for Michigan's economy.
With the industry in crisis mode, it remains to be seen how businesses will adapt to the new tax and changing landscape. One thing is clear, however: the future of Michigan's cannabis market looks bleaker by the day.
. It's like they're trying to kill the industry before it even had a chance to breathe. 24% levy? That's insane! How are people supposed to make ends meet with prices that high? It's just gonna push more people underground, and we all know how well that turns out. The state should be helping these guys, not strangling them with taxes. And what about the jobs? Thousands of people lost already? This tax is a disaster waiting to happen 
Small businesses and growers are already struggling as it is, and now they're gonna be hit with even more taxes? It's like, how are they supposed to survive? 
. I feel for the growers and small businesses who are trying to make a living here. We need some kinda support system in place to help them adapt to this new tax.
. It's like, what's the plan for supporting these communities when the industry takes a hit? We need to think outside the box here 
That's gonna hurt the little guys for sure. And what's up with trying to limit competition now? Sounds like corporate interests are calling the shots as usual. The people are just gonna get caught in the middle, paying more and getting less. It's all about who you know and who you're connected to in this case. The small cities and communities that rely on cannabis revenue are already feeling the squeeze. This is just another example of how our politicians can't seem to balance the books without hurting the very people they're supposed to be helping. 
. Those corporate retailers are just gonna swoop in and take over, leaving all the small growers to fight over the scraps 
. And what's gonna happen to all those people who lost their jobs? Not exactly a great vibe for the future 
.
It's like they're sucking the life out of it.
I've heard some people talking about how the industry was supposed to be a way for small businesses to thrive and create jobs, but now it's like they're being strangled by the state.
back in the 90s, like, what happened to a thriving industry? Remember when people used to get so hyped about new gadgets and tech? Now it's all about survival mode 
. And what's with this tax drama? It's like they're trying to recreate the good ol' days of the "War on Drugs" - you know, when we were all told that weed was bad news 
. I'm not sure how these small businesses will keep it together, but I do hope they figure something out before it's too late 
!
... I mean, come on, 24% tax on wholesale cannabis? That's just gonna push smaller guys out and let the big boys thrive (and profit from) their demise 
.
This tax is a disaster waiting to happen!
I mean, what's next? are they gonna tax us on air or something? 
i get it, businesses need to make a profit, but 24% is just straight-up brutal 
. I get that prices can be high, but 24% tax on wholesale cannabis? That's a recipe for disaster 
it's like, they just need some support or something... maybe a temporary tax cut or help with regulations? idk but this new tax is definitely not helping... 
.