California’s cannabis market, long the dominant player in the U.S., now faces competition from Michigan. As Michigan approaches its fifth anniversary of legal recreational marijuana sales, it has overtaken California as the largest cannabis market in the U.S. by certain metrics.

Metrics of Success

According to BDSA, Michigan has sold more total grams of flower and units of other cannabis products (equivalent unit sales) in both the recreational and medical markets since December 2022. Headset data shows Michigan selling more units than California since June 2023, with Michigan selling 24.2 million units in May compared to California’s 17.3 million units.

Price Differences

Despite Michigan’s lead in unit sales, California remains larger in dollar sales, with $5.1 billion in recreational marijuana sales in 2023 compared to Michigan’s $3 billion. This disparity is due to cheaper cannabis prices in Michigan, allowing consumers to buy more products for less money.

Market Challenges

California faces high taxes and competition from illicit cannabis, impacting its legal market. Conversely, Michigan’s market has seen price drops due to oversupply, benefiting consumers but squeezing retailer margins. Michigan sold 56.8 million equivalent units of cannabis in April, surpassing California’s 44.6 million units.

Future Projections

Michigan’s cannabis industry is notable for its rapid growth and high per capita sales of $132.41, compared to California’s $44.21. Despite this, BDSA forecasts that California will continue to lead in dollar sales, reaching $6.1 billion by 2028, while Michigan is projected to be a $4 billion market.

Michigan’s rise as the top cannabis market by sales volume highlights its rapid growth and competitive pricing, positioning it as a significant player in the U.S. cannabis industry.