“I have accounts at multiple dispensaries, so I get notifications when they make deals, and that’s always when I buy,” Poag said.
Justin Palmatie, who owns dispensaries at Lake Effect and Doja in Portage, said retailers were able to buy marijuana at low prices and increase sales. When his outpatient clinic reduced the price per gram to $ 5, competitors quickly caught up with her.
When Lake Effect began selling an ounce for $ 100, or 28 grams, some competitors lowered the price to $ 75, Palmatie said.
“If a local competitor has lowered their prices, we need to compare or beat them,” Palmatie said. “When prices fall, we start rushing to the bottom.”
Brisbane said he was unsure when the retail price would bottom out. Until prices start to rise, some manufacturers say they are struggling to make a profit.
Large marijuana plants are opening up more often, displacing smaller operations, said Chris Christchmer, general manager of Homegrown Cannabis Company in Lansing, which grows marijuana for wholesale and sells it at retail.
Two years later, the number of producers has almost quadrupled to 1,238, and more than a third of them – 458 – are classified as Class C, larger operations that can collect 2,000 to 10,000 plants.
In one year, the volume of recreational pots in the market jumped from 273,453 pounds to more than 1 million pounds, government records show, leaving the market oversaturated.
“We knew it was going to happen, but it happened faster and more aggressively than anyone expected,” Crestmer said. “It’s been a tough game for us.”
Operators of some farms – for example, a massive one is planned in Lawrence in southwestern Michigan – Collaborated with communities to change regulations that allowed multiple licenses to be combined to grow even more marijuana.
Crestmer said farmers will continue to fight until more cities allow marijuana stores to open or the state limits the number of licenses producers can have at a time.
Nearly 80 percent of Michigan municipalities, 1,400 out of 1,773, ban the sale of marijuana, while the state allows local municipalities to regulate the amount of cultivation in their cities.
Cities, especially those in difficulty, have an economic motive to allow larger operations.
A 10 percent sales tax in Michigan – paid in excess of the usual 6 percent sales tax – is at the bottom of 18 states where marijuana is fully legalized. In Washington, for example, the tax 37 percent taxwhile in Arizona it is 16 percent.
Last year, Michigan collected about $ 350 million in taxes on marijuana sales. Cities and counties receive 15 percent of this excise tax.
A small community, such as Lawrence, with a population of 1,000, could receive $ 200,000 from a major operation or twice the annual budget from marijuana.
“If you see larger (producers) coming in and growing thousands of square feet of produce, (then) releasing it at lower prices, it makes everyone else lag behind that price,” Palmatier said.
“Smaller guys can’t compete at that price level, and they won’t know about it until it’s too late. So they may end up closing down. ”
Palmatier is concerned that if small-scale cultivation operations cease, large companies will raise prices when the price reaches bottom and limits the market.
“Ultimately, I think we will see fewer options at higher prices from these large companies,” Palmatie said.