In the past year, no cannabis market has had stronger sales growth than Michigan, propelling the state to $2 billion in sales, with more growth ahead, according to an analysis by Headset.
According to the analysis, Michigan’s total sales grew by 28.2% in the past year, “by far the strongest sales growth of any Headset tracked market.” Michigan is now the No. 2 market in the country, as sales in the rest of the Headset-tracked markets shrunk a combined 5.4%. According to Headset data analyst Mitchell Laferla, only Massachusetts and Illinois also experienced year-over-year sales growth, while older markets “stalled.”
Michigan’s growth is taking place at a time when prices are dropping, which means consumers are buying more products per visit. Average basket size has decreased 17% year-over-year and average units per basket has increased by 23.9% during the same period, driven by falling item prices and heavier discounting.
And while flower remains the top-selling item, accounting for 47.8% of sales in the past six months, it is also leading the overall price drop, falling 21.3%. The next four largest categories by sales share (vape pens, edibles, pre-rolls and concentrates), all saw average product price decreases of more than 10%.
But again, the drop in prices meant additional sales in some cases. In pre-rolls, for example, sales have increased 81% in the past year. Beverage sales, an admittedly small category, have grown 276%.
“Michigan is in its growth stage along with other new markets such as Massachusetts and Illinois,” Laferla said in an email. “That doesn’t mean it has been spared from the woes of things such as price compression, which is affecting the market at large. However, supply is still rising to meet the demand of its large population.”
— Brian Beckley