BANGOR, Mich. — Local marijuana shops are facing a hazy outlook after Michigan’s Cannabis Regulatory Agency showed that prices are dropping 40 to 50-percent, and supply is outgrowing consumption.
FOX 17 learned that a lot of dispensaries in cities like Grand Rapids are selling just to cover costs. In some cases, they’re selling at a loss.
Red Arrow Farms, a family-owned shop in Van Buren County’s Bangor, is growing about 20,000 plants.
They say something needs to be done soon to fix this or a lot of local mom-and-pop shops will go out of business.
“It kind of is a race to the bottom now,” explained Brittany Roelofs, co-founder of Red Arrow Farms. “We’re hanging on by a thread and I think that’s kind of the case for most people that are like us and anyone that’s any smaller.”
FOX 17 learned at the Michigan’s Cannabis Regulator Agency’s quarterly meeting that the price per ounce of marijuana is declining significantly from year to year.
The medical market saw a 48-percent decrease from July of 2021 to July of 2022. The adult-use market saw a similar decrease, hovering at 44-percent.
“The price has just been bottom, bottom level, the lowest that we’ve seen it really ever for the last, for this last summer and it’s been, it’s been rough,” Roelofs said. “If they want that good product that’s grown with craft cannabis touch, there’s a cost to that as well.”
Some consumers could see this as good news because they’re paying less for more, but of course, there’s a tradeoff.
Now, the CRA is looking at a moratorium on grow licenses.
Another option is whether the agency should eliminate excess grower licenses.
The third option the CRA is considering is putting a pause on allowing people to have more than five grower licenses and one marijuana microbusiness, which right now, is set to start in 2023.
“There’s still hope right now, but if it keeps dropping, we probably won’t be able to hang on. You know, if flour drops down to $200 a pound, everyone’s losing money at that point,” Roelofs added.
The CRA says there is about a 50-percent increase in immature plants; about one million adolescent or vegetative plants, which is around a 300-percent increase; and about a 70-percent increase in plants ready for harvest.
At this point, it’s unclear when the CRA will decide which option to take to help level out supplies.
