Michigan Cannabis Market Growth, Size

The Michigan Cannabis Manufacturers Association (MCMA) retained Anderson Economic Group to review the structure of Michigan’s cannabis market and determine the size of the cannabis market by segment, including licit and illicit.

Cannabis is one of the nation’s fastest growing cash crops. In Michigan, medical cannabis has been legal for over a dozen years, and the state concluded its first year of adult-use sales in 2020. Legal cannabis has given rise to new businesses and  generated new jobs and revenue for the state.

MCMA and others have raised concerns that, despite cannabis’ legal status in Michigan, many consumers continue to procure cannabis from the illicit market. Cannabis sold in the illicit market is not subject to the safety and testing requirements of cannabis sold at retail stores (medical provisioning centers and adult-use stores). Illicit transactions also do not produce tax revenues.
We conducted a thorough review of the history and structure of Michigan’s cannabis market. Our review consisted of analyzing federal and state cannabis statutes, cannabis case law, and empirical literature on the social impacts of cannabis legalization. We then constructed a customized cannabis demand model to estimate the size of the Michigan cannabis market, which includes a number of transactions that occur across unobserved channels. Our cannabis demand model is based on our expert understanding of the cannabis market and builds on multiple years of experience in forecasting demand for cannabis. Our model breaks down Michigan’s cannabis market by segment, including retail sales, medical caregiver transactions, and other licit and illicit transactions.

We found that one in five Michigan residents used cannabis in 2020 – an increase of 75% since 2010. We estimated that Michigan’s cannabis industry totaled $3.1 billion in 2020. In 2020, retailers reported sales of approximately $1.0 billion. The remainder of cannabis consumed across the state came from non-retail sources, including home cultivation, medical caregivers, and illicit adult-use sales.

Read more here: AEG Michigan Cannabis Market Overview