Michigan passes California in marijuana units sold, per capita spend and more

Three years ago, cannabis industry stakeholders viewed New York as the state most likely to dethrone California as the nation’s largest regulated marijuana market.

Today, Michigan leads the nation in several key metrics.

With almost four times the population of Michigan, California’s regulated marijuana market should be comfortably outselling Michigan.

But it’s not.

 

California’s marijuana hurdles

Recreational sales in California have been slowly declining, falling 17% since they peaked in April 2021 at $432 million.

High taxes, bureaucracy and continued pressure from the illicit market have created an unfriendly business climate in California, causing many operations to struggle and even close.

Meanwhile, Michigan’s booming recreational marijuana market has been punching above its weight and is finally closing the gap – even surpassing top-ranked California in some consumer sales metrics.

 

Michigan's secret to success

Per capita, Michigan marijuana buyers are outspending their California counterparts more than three times over.

The difference in per capita spend between the two is exaggerated even more, as California's spend is well below the national average and Michigan's is above average.

Michigan also is selling more units of marijuana per month than other states, according to retail data from Seattle-based cannabis analytics company Headset.

Units refers to the number of items sold, no matter the form, such as an ounce of flower or a package of edibles.

Michigan surpassed California, which previously led the nation in units sold, in June 2023 by moving 18 million units of marijuana - 1 million more than California.

Since then, California units sold have stalled to roughly 17 million per month, while Michigan has continued to expand, selling a record 25 million units in May.

 

Michigan consumers also are outpacing California when it comes to the number of items sold and amount spent at the checkout counter.

Basket size is a measure of consumer behavior that gives retailers an understanding of buying patterns in the store; retailers also can use basket metrics to understand what product categories consumers value.

With about 4.1 items per basket in 2023, Michigan consumers put almost double the number of items in their carts as Californians, with 2.2 items per visit.

At the same time, Michigan consumers put almost $10 more product in their baskets than California consumers.

More items and greater spend most certainly have helped Michigan close the sales gap with California.

Some of these metrics could be driven by differences in the product preferences in each state.

Of the recreational marijuana products sold in Michigan through April 2024, almost half (47%) were flower; in California, flower accounts for only 34% of products sold in the same time period.

This allows for more diverse sales in California, including edibles, vapes and other forms of marijuana, such as tinctures and topicals.

The race among U.S. marijuana markets is likely to change in the coming year as adult-use sales come online in other states, especially New York and Ohio.

Andrew Long can be reached at andrew.long@mjbizdaily.com.