Cheap Marijuana Destroys Michigan Black Market

The race to the bottom for marijuana prices has led to unintended consequences. Just one harvest now called Croptober in Michigan happened in October of 2024 and so much marijuana was harvested that bulk prices dropped to $250 a pound, and it was reported that marijuana went unsold for as little as $150 a pound. Assuming marijuana at $250 a pound, how can dispensaries and dealers on the street stay in business? They can't, most dispensaries and production facilities in Michigan have closed, and almost all national companies have pulled out of Michigan, as well as all marijuana investors.

In February and March of 2025 one dispensary in Dearborn Heights Michigan sold 2 oz of marijuana for $45, that came out to $52.50 out the door, they had two kinds of indoor hybrid smalls as well as a 26% tested outdoor indica strain, and you don't have to buy 2, they will sell a single ounce for $26. What does that mean for the dealer on the street? They will have to match it. Just 6 months ago marijuana was around $60 to $80 an ounce, by a month ago it was 2 oz for $65, and now it's 2 oz for $45, and every time the price drops in the dispensaries the dealers on the street have to match it or their customers will say, “I'll just get it at the dispensary.”

So how does the math work? Well assuming everything is $250 a pound and not $150 and dispensaries sell it for $25 an ounce, the dispensaries make $400 a pound and pay $250, as long as they sell concentrates, vapes, edibles, and bottom, middle and top shelf weed the dispensaries that still exist should be fine.

But what about the dealers? They will all have to go out of business. Just 1 year ago when prices dropped to $600 a pound a street dealer could still exist on 20 customers each getting an ounce a week for say $80 an ounce, and that would result in around $35,000 a year profit, enough to live on in some states. But at $250 a pound and having to sell for $25 an ounce the new math as of this month is that 20 customers buying an ounce a week only yields $7,800 profit per year, not enough to live on in any state. 

And it is not like a street dealer can just come up with another 100 customers to make the math work because the foot traffic would draw police attention, and over 21 can buy legally for recreational purposes at dispensaries in Michigan where you can get tested pot for $26 an ounce. And it is not like a dealer can get a full time job and still deal weed to 20 people, or get potheads to smoke more weed, most heavy smokers only smoke an ounce a week or so.

All dealers in Michigan will tell all but a few close friends that they are going out of business, and then will only supply to say 3 friends, will take a pound, split it in 4, charge $100 a quarter pound, and keep a quarter pound for themselves making only $50 a month or $600 a year, doing it just for the free weed. That is the only math that works now, and it means all dealers will have to go out of business and get full time jobs just to survive.

But how cheap is $25 an ounce really? Around 40 years ago OG Kush arrived on the scene with 5% THC and a cost of $50 for an 1/8th of an ounce. Now 40 years later and 26% THC weed is $26 an ounce, plus inflation has tripled, if just looking at the amount of marijuana, 40 years ago you got an 1/8th of an ounce of high quality weed for $50 and now you get 1/8th of a pound of high quality weed for about $50, 16 times as much, and then you add that inflation has more than tripled and you get 48 times as much weed for the same purchasing power, and then it is also 5 times as potent, so you get 240 times as many milligrams of THC per dollar than 40 years ago. 40 years ago THC cost about a dollar per milligram, and now you can get 280 milligrams of THC per dollar.

The only way for weed to be any cheaper is if they grow it in fields like corn, then I predict the price could go far, far lower, dropping to somewhere between the price of corn and the price of tobacco per pound. And if it is federally legal marijuana would not be limited to within one state, which would also lower prices in a free for all to the bottom, allowing California and Oregon to sell their mountain grown weed all across the United States, which is when you will hear people talk about the terroir of weed like they do wine, and Humboldt and Mendocino California will become to marijuana like Napa and Sonoma are to wine.