Three months after the adult-use floodgates opened, Michigan's cannabis industry is continuing to expand.
Michigan's legal weed market made a strong start last December, selling $221,000 worth of weed on the first day of sales, and logging $3.1 million in sales during the first two weeks of legalization. These two initial weeks of sales brought the state over half a million dollars in tax revenue.
Sales have continued climbing on a monthly basis, according to a new report by the state Marijuana Regulatory Agency. In February, legal weed retailers made $14.8 million in sales, a sizable 34 percent increase over the $9.8 million sold in January, and more than double the $7 million sold in December.
The increase in sales is likely due to the increased access to legal weed across the state. The number of licensed retailers grew from 42 in January to 59 last month. That number is still growing, and there are now 74 legal pot shops as of this week, according to the state's Licensing and Regulatory Affairs agency.
As access to legal weed increases, prices are dropping. When sales began in December, the average price of an ounce of weed was $561.21. In January, that average price dropped to $512.05 an ounce, and last month, it dropped to $494.77.
Michigan will be able to collect nearly $2.5 million in legal pot sales tax revenue for February's sales, based on a 10 percent excise tax, plus the standard state sales tax of 6 percent. On top of this, the state collected nearly $1.4 million in licensing fees, according to the report. About $344,000 of this revenue was used to fund the state's cannabis regulatory agencies.
The first $20 million in pot tax revenue will be used to fund a medical marijuana research program. Once this funding goal is met, most of the remaining weed tax revenue will be divided among state government programs: 35 percent will go to the School Aid Fund for K-12 education, and 35 percent will go to the state Transportation Fund for road repairs. Another 15 percent will go to cities that allow adult-use weed sales, and the final 15 percent will go to individual counties.
Michigan's medical marijuana industry is holding steady as the adult-use industry grows. Last month, licensed dispensaries sold $25.7 million of medicinal pot, up slightly from $25.2 million in January and $24.9 million in December. But, as the prices of adult-use pot fall, the price of medical cannabis is increasing. Prices rose to $285.50 per ounce in February, up from $267.30 per ounce in December.
As impressive as Michigan's initial sales have been, they pale in comparison to nearby Illinois, which made nearly $40 million of legal pot sales in January, its first month of legal sales. The combined sales from both of these Midwestern states don't even come close to touching Colorado's sales figures, though. This January, the Boulder State's six-year-old adult-use market moved an impressive $140 million worth of legal weed.