Michigan’s budding industry nears $3.2B

Study reflects vibrant cannabis marketplace with ‘unlimited economic potential.’
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Michigan had a nearly $3.2 billion cannabis market in 2020 with almost 400 licensed medical provisioning centers and 300 licensed adult-use retail stores. Despite this, illicit sales continue to be Michiganders’ primary mode of procuring cannabis, despite recreational use being legal since 2018.

The Michigan Cannabis Manufacturers Association commissioned Anderson Economic Group for a major economic study pertaining to Michigan’s growing cannabis industry.

“The Anderson Economic Group study reflects a vibrant regulated marketplace with unlimited economic potential,” said Shelly Edgerton, MCMA board chair. “This includes continually growing demand for medical- and adult-use cannabis across the state. The study also suggests continued growth in state revenues for schools, senior programs and other essential services. That’s good for all Michiganders, regardless if you consume cannabis.”

Medicinal cannabis has been legal in Michigan for over a dozen years and the state concluded its first year of adult-use sales in 2020.

In 2020, cannabis retail stores sold $985 million in cannabis products. The commercial cannabis industry also generated $129 million in taxes and fees. This includes sales and excise tax revenue; grower, processor and retailer license fees; and registration fees for medical patients.

The number of cannabis users in the state has grown by 75% since 2010. In 2020, one in five, or roughly 2 million Michigan residents, used cannabis. Roughly 80% of Michiganders also live within a 20-minute drive of a medical provisioning center or adult-use store.

Consumers in Michigan can acquire cannabis through multiple channels, including home cultivation, from a designated medical caregiver, purchasing cannabis from a medical provisioning or adult-use retail store, or purchasing from an illicit seller.

“Our research shows that legal cannabis provides a number of benefits to Michigan, including assurances that Michiganders have access to a safe product that generates tax revenues for state and local government,” said Brian Peterson, Anderson Economic Group director of public policy and economic analysis. “Our research also shows that a large amount of cannabis comes from sources that are not subject to the state’s safety testing requirements. Transactions from these sources typically do not produce tax revenue.”

The MCMA also expressed concerns about the illicit market.

“While there have been many successes in Michigan’s regulated cannabis industry, there are major storm clouds on the horizon,” said Stephen Linder, MCMA executive director. “The Anderson Economic Group study shows large quantities of untested, illicit cannabis continue flooding the market. This poses a significant threat to patient and consumer safety. The study makes clear Michigan can and should be a leader in cannabis safety, innovation and entrepreneurship. With this information in hand, we now have a full picture of Michigan’s cannabis market and a clear understanding of the challenges that lie ahead.”

In 2020, nearly 70% of all cannabis consumed in Michigan came from nonretail sources, including caregivers, home cultivation ($930 million) and the illicit market ($1.2 billion), according to the report. 

Anderson Economic Group is an economics consulting firm with offices in East Lansing and Chicago, Illinois. The firm has produced estimates on the size of cannabis markets in all 50 states since 2015.

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