A Michigan cannabis cultivator who survived decades of prohibition now argues that legalization has created economic barriers more destructive to craft growers than enforcement ever was.
The grower, who operated in Michigan's medical market before adult-use legalization in 2018, points to licensing fees, compliance costs, and testing requirements that have pushed small-scale producers toward insolvency while multi-state operators consolidate market share.
Michigan's adult-use market generated $3 billion in sales in 2023, but craft cultivators have captured a shrinking slice of that revenue. State data shows the average price per ounce fell from $295 in 2020 to $95 by late 2023, squeezing margins for growers who lack the scale to compete on price.
The Economics of Getting Squeezed
The financial pressures start before the first plant goes in the ground. Michigan's Class C cultivation license costs $40,000 annually, plus facility buildout expenses that typically exceed $500,000 for climate control, security systems, and testing lab contracts. Small growers who built their reputations on quality genetics and hand-trimmed flower find themselves competing against automated facilities producing thousands of pounds monthly.
"You could grow the best cannabis in the state, but if you can't afford the testing, the packaging requirements, the track-and-trace system, you're not getting to market," the grower told High Times.
Testing alone runs $200 to $400 per batch in Michigan. Multiply that across multiple harvests, add in mandatory packaging and labeling costs, and craft producers are spending thousands monthly on compliance before they make their first sale.
Corporate Consolidation Accelerates
Multi-state operators have moved aggressively into Michigan since 2019. Companies like Verano, Cresco Labs, and Green Thumb Industries now control significant cultivation capacity and retail presence. Their vertical integration—growing, processing, and selling through owned dispensaries—cuts out independent cultivators who lack direct retail access.
The pattern mirrors what happened in Colorado, Washington, and Oregon, where craft growers initially thrived under medical programs but struggled after recreational legalization brought corporate capital and economies of scale. Oregon's market collapse in 2019, when wholesale prices dropped below $100 per pound, forced hundreds of small farms out of business.
Michigan craft advocates have pushed for microbusiness licenses and social equity provisions, but implementation has been slow. The state's social equity program, designed to help communities harmed by prohibition, has approved fewer than 50 licenses since launching in 2021.
What Craft Growers Want
Industry groups representing small cultivators are lobbying for tiered licensing fees based on canopy size, expedited microbusiness approvals, and retail shelf space requirements for Michigan-grown craft cannabis. Some point to California's appellations program, which allows growers to market regional origins similar to wine country designations.
But without immediate relief, many craft operators are considering exits. The grower interviewed by High Times said several colleagues have already sold their licenses to larger operators or simply walked away from the industry they helped build underground.
The Michigan Marijuana Regulatory Agency has not announced new policies to address craft cultivation concerns. The agency's next quarterly market report is expected in early 2024.
This article is based on original reporting by hightimes.com.
