| When writing about small-scale cannabis growers calling for a licensing moratorium last month in Michigan, I was somewhat shocked given the state’s adult-use retail market isn’t even 3 years old. Amidst record-low flower prices—which dipped to $116.84 an ounce on average in August—many complaints at the Michigan Cannabis Regulatory Agency’s quarterly meeting Sept. 14 stemmed from worries that larger operators are in a “race to the bottom.”
At the end of August, there were 125 “excess grower” licenses held by 25 businesses that cumulatively were able to grow a total of 250,000 extra plants at one time. But Michigan’s total adult-use flower inventory was roughly 313,000 pounds at the end of August, representing about a six-month supply in the state based on retail demand for that month. In addition, total flower supply had decreased for three consecutive months as retail sales continued to soar.
The same can’t be said in mature markets out West, specifically Colorado and Oregon. Although regulators in Oregon implemented a licensing moratorium in April, wholesale ($600 per pound) and retail ($118 per ounce) prices showed no signs of rebounding as of September, as the state continues to battle aggregate supply issues with statewide sales decreases. Through September 2022, Oregon’s adult-use retail sales are down 15% this year compared to 2021—the first downward trend in a calendar year since the state’s 2015 launch.
In Colorado—the adult-use guinea pig of the U.S.—2022 sales also face a downtrend for the first time since the state’s 2014 launch. Through July 2022, Colorado’s adult-use sales are down 16.5% this year compared to 2021. The average wholesale price of $658 per pound also represents a record low for the state, prompting a coalition of 30 licensees to plead their case for a licensing moratorium to the state’s Marijuana Enforcement Division, Westwordreported.
However, unlike in Oregon and Colorado, Michigan is not facing a downward trend in statewide retail sales. But perhaps the pro-moratorium operators in Michigan are hoping to avoid the likes of their adult-use predecessors out West before it’s too late. Regardless, lobbying the CRA to cease issuing licenses may fall on deaf ears with the state’s 2018 ballot initiative incorporating an unlimited license structure.
To implement a moratorium in Michigan, there would need to be a supermajority of state legislators in favor of doing so.
-Tony Lange, Associate Editor | 