Michigan Cannabis Sales Surge as Ohio Enters Cannabis Market

Ohio’s Legal Cannabis Sales Begin, but Michigan’s Cannabis Market Remains Strong

As recreational marijuana sales began in Ohio last month, the cannabis industry in Michigan wondered how this new market would impact its own thriving businesses, which have long attracted customers from across the Ohio border. Despite Ohio’s entry into the legal cannabis market, recent data shows that Michigan’s dispensaries remain resilient and continue to grow.

Ohio Residents Crossing State Lines for Cannabis

For years, Ohio residents have been crossing state lines to purchase marijuana in Michigan, where recreational use has been legal since late 2019. Cities like Monroe and Morenci, located near the Ohio border, have become hotspots for dispensaries catering to Ohio customers. Many of these dispensaries openly advertise their proximity to Ohio, capitalizing on the lack of legal recreational marijuana in the neighboring state.

With the legalization of recreational marijuana sales in Ohio, which began in early August, it was expected that some of this cross-border traffic would decrease. Ohio dispensaries reported nearly $55 million in recreational cannabis sales during their first month of operation. However, Michigan’s Cannabis Regulatory Agency released data indicating that the impact on Michigan’s cannabis market has been minimal, if not nonexistent.

Michigan’s Cannabis Market Continues to Thrive

Despite the introduction of legal sales in Ohio, Michigan’s cannabis industry posted strong numbers in August. Michigan dispensaries sold $294 million worth of recreational cannabis products in August, up from $286 million in July. This represents a nearly 3% increase month-over-month and a substantial 9% increase compared to the $271 million sold in August 2022.

Even when analyzing sales in regions along the Ohio-Michigan border, the numbers remained positive. Southwest Michigan dispensaries reported $86 million in recreational marijuana sales in August, up from $82 million in July. Similarly, in the east and southeast Michigan regions, sales grew to $123 million in August, compared to $121 million in the previous month.

These numbers demonstrate that Michigan’s cannabis market remains robust, even as Ohio begins to establish its own legal cannabis sales. The resilience of Michigan’s dispensaries in the face of new competition highlights the strength of the state’s cannabis infrastructure and consumer base.

Border Dispensaries See Mixed Results

While overall sales in Michigan’s border regions remained strong, some individual dispensaries felt the effects of Ohio’s new market. Sean Lyden, president of Green Labs Provisions, a dispensary located just six miles from the Ohio border in Luna Pier, reported a 15% decline in sales during August compared to July.

Despite the dip in sales, Lyden remains optimistic. He noted that many Ohio customers are still crossing the border to purchase cannabis in Michigan due to differences in product quality and price. “A lot of those customers are realizing that [the cannabis is] not as good in Ohio, and they’re still driving up to see us,” Lyden said. “So we’re pretty confident going into the future here.”

Price Discrepancies Driving Ohio Consumers to Michigan

One of the key factors keeping Ohio consumers coming to Michigan is the stark price difference between the two states. In Ohio, the cost of cannabis is significantly higher due to the limited number of dispensaries and the relative immaturity of the market. An ounce of marijuana flower in Ohio costs around $250, while the same product in Michigan was averaging about $80 in August.

Michigan’s recreational cannabis market, which is nearly five years old, has seen prices drop dramatically since its inception as supply has increased and competition has intensified. In contrast, Ohio’s market is still in its infancy, with fewer dispensaries and higher prices due to limited competition. This dynamic is expected to persist in the near term, encouraging Ohio consumers to continue making the trip to Michigan for cheaper and higher-quality products.

The Future of Ohio’s Cannabis Market and Its Impact on Michigan

As Ohio’s cannabis market matures, it’s possible that competition will drive prices down, and more consumers will choose to buy locally rather than traveling to Michigan. However, for now, Michigan dispensaries, particularly those near the Ohio border, are still attracting a significant number of Ohio customers.

Looking ahead, Sean Lyden of Green Labs Provisions is planning to expand his business to reduce reliance on Ohio customers. He is considering opening another dispensary in Michigan and possibly one in Ohio, which would allow his company to capture sales in both states.

While the legalization of recreational marijuana in Ohio has introduced new competition for Michigan’s cannabis industry, the latter has proven to be resilient. Michigan’s established market, with its lower prices and greater variety, continues to draw consumers from Ohio, even as the neighboring state begins its journey into the legal cannabis industry.