As recreational marijuana sales began in Ohio last month, the cannabis industry in Michigan pondered the potential impact on its own thriving market, which draws customers from across the border in Ohio.
Ohio residents are well aware of the fact that they often venture across state lines into Michigan to purchase marijuana. In cities like Monroe and Morenci, there are numerous dispensaries located near the Ohio border, with many of them even promoting their close proximity to Ohio.
In the first month of legal recreational marijuana sales, which began in early August, Ohio dispensaries sold approximately $55 million in cannabis products.
However, recently disclosed data from Michigan’s Cannabis Regulatory Agency shows that Michigan shops were unaffected. In August, consumers purchased $294 million in recreational cannabis products from Michigan dispensaries, up about 3% from $286 million in July and nearly 9% over the $271 million sold in August of the previous year.
Even when broken down by area, sales in Ohio-bordering regions climbed in August compared to July.
In southwest Michigan, for example, recreational marijuana sales totaled $86 million last month, compared to $82 million in July. In the east and southeast Michigan regions, recreational marijuana product sales totaled $123 million in August, compared to $121 million in July.
Still, Sean Lyden, president of Green Labs Provisions, a recreational marijuana store in Luna Pier, roughly 6 miles from the Ohio border, said that sales were down about 15% in August compared to the previous month.
Lyden admitted to being concerned about the future, but he believes the worst is behind him for the time being.
“A lot of those customers are realizing that the cannabis is not as good in Ohio and they’re still driving up to see us,” said Lyden. “So we’re pretty confident going into the future here.”
Ohio’s marijuana prices are significantly higher than those in Michigan. In August, an ounce of flower costs approximately $250 in Ohio and $80 on average in Michigan.
Michigan’s recreational cannabis market has been open for nearly 5 years, and costs have dropped dramatically as supply and competition have expanded.
In the short term, while prices in Ohio are higher than in Michigan because there are fewer recreational marijuana dispensaries (which allows them to charge more because there is less competition), Lyden anticipates that many Ohio consumers will continue to drive to Michigan to purchase cannabis.
As Ohio’s industry matures, Lyden plans to grow with another dispensary in Michigan and possibly one in Ohio, reducing Green Labs Provisions’ reliance on revenues from Ohio clients visiting its Luna Pier facility.
