Why are marijuana prices in Michigan so high?

Marijuana in MI

GRAND RAPIDS, Mich. (WOOD) — The excitement of many who dreamed of marijuana being as legal and accessible as a Budweiser has been tempered by sticker shock when they see the prices at Michigan’s new pot shops.

Why is weed so pricey here?

“We have so few growing facilities available that we are just not able to produce the amount of the demand,” explained Benham Wrigley of CannexLaw, one of the state’s premier cannabis industry attorneys.

In Michigan, the average price of an eighth of an ounce of marijuana at one of the state’s 27 shops is between $45 and $65. That puts Michigan at the top of the prices among states with an active adult use market. Other new markets like Illinois and Massachusetts have similar prices.

Meanwhile, in Oregon, which has had legal marijuana since 2014, the same eighth of an ounce can be purchased for less than $20.

Chris Silva, who has been a leading advocate for legalized marijuana, says Michigan’s system is keeping prices inflated.

“Testing and the regulatory component definitely adds to the price,” Silva said.

Much of the marijuana coming into the recreational market is from former marijuana caregivers rather than recreational growers.

“There’s still just a problem getting the supply where it needs to be to even maintain at the medical marijuana markets let alone the adult use markets,” Silva said.

Wrigley, the marijuana industry attorney, says the blame lies not with the state, but rather with the businesses.

“Truly, it’s the fault of the people who weren’t ready. They just haven’t been able to get properties fast enough,” Wrigley said, calling it basic economics. “We have so few growing facilities available that we are just not able to produce the amount of the demand.”

Then there is another problem: The legal weed is much more expensive than what’s on the black market.

On legal shops on the the east side of the state, $45 to $65 for an eighth of an ounce is typical. The two stores in Muskegon come in at $55 to $70. Stores in Rogers City and Evart show those same price points. Perhaps the cheapest in the state is a Bay City store called Dank on Arrival. It has a number of options at $34 for an eighth.

“It is difficult for just a regular consumer to think about paying $65 plus excise tax when they can get it down the street for $40,” Silva said. “From the street, you’re looking at $25 to $35, depending on your relationship with the guy. … (And) the licensed product is not as good, generally.”

But for the first-time marijuana user, the regulated product is a way to enter the marijuana market. Those who use it medicinally appreciate that the marijuana is certified safe.

>>Inside woodtv.com: Marijuana in Michigan

Still, the cost is jolting and could continue to rise.

“One of the major growers is now asking $7,000 a pound from independent retailers,” said Wrigley, noting that prices have recently been less than $5,000 a pound. “Why isn’t the attorney general stepping in and taking the kind of action that she would take if these were price gouging gasoline stations?”

But the experts say change is coming.

“Just like here in Grand Rapids with craft (beer), I think there’s going to be people who want something a little bit better, a little more unique,” Silva said.

In Oregon, it took time for prices to come down even though that state had a surplus.

“It will still take time to grow the weed to get it into the marketplace,” Wrigley said.

Both Wrigley and Silva expect it to take about two years for the prices in Michigan to stabilize.

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