For the first time ever, Michigan marijuana industry jobs declined over a three-month period.
Prices plummeted to another historic low in January, revenue hit a 12-month basement, investment continues to constrict and business expansion has trickled to a drip.
Announcements of multi-million-dollar expansions have given way to press releases apologizing for closures.
Has Michigan’s once-sparkly marijuana market lost its luster?
Some businesses and workers think so, but customers continue to reap the benefits in a “race-to-the-bottom” market flooded with options and once unimaginably low prices.
Connoisseurs feel quality has suffered. Producers seem laser-focused on quantity — and potency — over quality. But that didn’t deter marijuana customers, who spent $3.2 billion in 2024. Despite increased consumption, margins are shrinking, putting the jobs of Michigan’s nearly 38,000 marijuana employees at risk.
‘THE MORE YOU PRODUCE, THE MORE YOU LOSE’
Pincanna co-founder Robert Nusbaum said his company laid off an undisclosed number of employees and largely shut down its grow operation in January to “weather the storm” and called 2025 “a year of reckoning” for the industry.
“Kind of on a regular basis now, you see people going into receivership or multi-state operators just picking up and leaving,” Nusbaum said.
Related: Michigan marijuana company Pincanna cuts jobs amid industry transformation
Ounces of marijuana that once retailed for $120 or more are now being purchased for a third of that price, in some cases.
According to Nusbaum, wholesale prices for a pound of marijuana that previously fetched $1,500 struggled to find buyers at $150 per pound after enormous outdoor harvests flooded the market in October, referred to as “Croptober” within the industry.
“When prices get that low, the more you produce, the more you lose,” he said.
Key market observations, based on Cannabis Regulatory Agency data:
Since November, the industry has shed an average of 122 jobs per month, the first-ever decline. The market was adding about 1,283 jobs per months over the same period in 2022. As of January, the average retail cost for an ounce of marijuana was $66.50. The same amount sold for $152.74 per ounce in January 2022, representing a 56% price drop. Industry-wide sales increased 8% in 2024, compared to 33% growth the year prior.
‘EVERYONE IS TAKING A LOSS RIGHT NOW’
Even optimistic Robin Schneider, director of Michigan Cannabis Industry Association trade and lobbyist organization, has a tempered outlook.
“There are a number of grows that are slated for closure — I can’t disclose which ones,” she said. “I’m anticipating there will be several more closures in the coming months, and we are seeing a high number of layoffs within facilities that are staying open, as well.
“I’m hearing that they cannot sell the product that they have for what it costs to produce it, so everyone’s taking a loss right now.”
Schneider said she’s aware of at least three grows that are winding down operations and “struggling to get out from underneath” facilities and property that “is not worth what they owe on them.”
And since marijuana remains illegal under federal law, financial safety nets, like bankruptcy, aren’t available to them.
“There are people that are losing everything,” Schneider said.
DROP YOUR BADGE AT THE FRONT DOOR
Vast greenhouses at Pincanna’s multi-million-dollar, state-of-the art, 135,000-square-foot marijuana cultivation facility in Bay County’s Pinconning Township are bright, humid and mostly empty.
Employees who once roamed the cloning rooms and greenhouse aisles filled with thousands of marijuana plants, watering and pruning, are now filing for unemployment or job hunting.
As staff arrived at Pincanna on one morning in January, temp workers were immediately sent home, told their services were no longer needed. About 20 minutes later, full-time staff, including 29-year-old Paul French of Saginaw, were summoned to the warehouse.
“And then the HR comes into the room with security behind them and just reads us a boilerplate letter and just lets us go.” said French, who first began working for Pincanna as a $13.50-per-hour contract worker in 2023 and was later hired full time. “It was really degrading, to be honest. She tells us all to go clean up our stuff from the locker and if we want to get any help from unemployment … we have to drop off our badge at the front door.”
Pincanna isn’t alone. A surge of significant layoffs have stung Michigan’s cannabis industry in recent months.
Warren-based PharmaCann, a large-scale grower in Macomb County, intended to lay off 222 workers by February.
Citing “market challenges,” Fluresh laid off nearly 50 workers and shuttered its 105,000-square-foot facility licensed to grow upwards of 10,000 plants in November.
Retailers are closing and downsizing, too. High Profile in Marquette announced plans to end operations on Feb. 27; Sticky abruptly locked the doors to its Muskegon location in January; and a growing number of laid-off workers are looking for employment on cannabis industry social networking sites.
“In Michigan, all of the closings have kind of been like a shot out of left field,” said Jacob Petersmark, the chief operating officer for Auburn Hills-based United Green, a company that provides temp workers and hiring assistance to the cannabis industry. “People weren’t really expecting it.”
‘RACE TO THE BOTTOM’
When United Green opened in 2018, cannabis companies were flush with money but lacked expertise and were looking to hire high-level employees for management and operations, Petersmark said. There was a “migration of talent” from existing marijuana markets in California, Washington, Oregon and Colorado to Michigan.
Investment was bountiful. “Everyone was kind of thinking the same thing,” Petersmark said. “Oh, I’m going to go into cannabis and print money.”
Budgets and projections were based on a profit mirage that dissipated over the last several years.
“Getting funding in cannabis is borderline impossible right now,” Petersmark said. “Too many funders have been burned.”
Now, calls to United Green are usually for entry-level help needed just to keep operations afloat.
“I’d have to imagine that, you know, a lot of these companies are just trying to make payroll every week,” Petersmark said. “I know firsthand a lot of our clients are — I don’t want to say names — but a lot of people are week-to-week in cannabis.”
Petersmark called it a “race to the bottom,” a phrase that industry insiders began using at least three years ago. At that time, prices were double and triple what wholesalers make today. Most didn’t project the bottom to be so deep.
It’s led to desperation, according to Petersmark, Nusbaum and others who spoke to MLive.
“The customers are liking the pricing, but people are cutting corners,” Petersmark said, “Whether it’s they can’t hire for quality to make sure their products are safe or they’re using illegal product.”
BLACK MARKET COMPETITION
Black market concerns have always afflicted the marijuana industry, but with shrinking profit margins and companies clinging to life it’s become more of a worry.
“There’s a great deal of illegal marijuana that funnels its way into the state and is mixed in with the legal, tested stuff,” Nusbaum said. “The state is doing a much better job with enforcement … (but) it’s not where it needs to be.”
Nusbaum acknowledges “you can’t eliminate it all” but doesn’t want a business climate in which rule-abiding businesses close their doors while “bad actors” survive.
State marijuana regulators have increased enforcement in recent years. In January alone, nearly 115 disciplinary actions were issued against licenses, the vast majority resulting in suspensions or fines.
In 2024, the CRA issued 634 disciplinary actions and nearly 5,400 “educational warnings,” which are notice of violations without accompanying penalties, such as suspension or fines.
The CRA is currently building its own $4.4 million testing lab to try and limit illicit marijuana and keep customers safe. The lab is expected to begin operating this year.
‘A DOWNWARD TREND’
French, who has two children and a fiance, said the financial blow of losing his job at Pincanna devastated his family. He’s since found another marijuana industry job but said many former coworkers haven’t.
“All of these grows are getting away with shoddy practices, short-sighted thought processes, ruining people’s entire livelihoods,” French said. “There are people that I was working with who are currently homeless.”
French loves working with the cannabis plant. He hopes to make a career of it.
“But being able to put it into monetary value is so hard these days,” he said. “The industry itself seems like it’s not as promising. It looks like it’s on a downward trend, for sure.”
‘WE’RE A LONG WAY OFF’
As businesses struggle, new potential hurdles loom.
Gov. Gretchen Whitmer recently announced plans to tax marijuana wholesalers in an effort to raise $470 million in new revenue for road repairs. Currently, a 10% excise tax is added to retail sales but not charged to producers and processors upstream in the supply chain.
Related: Cannabis prices likely to increase if Michigan adopts proposed new tax
Industry insiders foresee a tough road ahead as the market and prices find profitable footing.
“There’s going to be a lot of big names that shut their doors in the next three months and even more in the next six to 12,” said Petersmark. “I think everything will level out in a year, a year and a half. That’s my optimistic hope.”
How long will Pincanna’s vast greenhouses remain unplanted? Nusabuam isn’t sure, but said as there are more casualties, especially among struggling grows, the supply will diminish causing prices to rise.
He said the wholesale price of marijuana needs to reach about $1,000 per pound “to create a healthy market.”
“We’re a long way off from that,” he said.
Prices hit historic lows, revenue slumps and businesses face closures as the Michigan marijuana market struggles. Read More
