When Greenhouse of Walled Lake, Michigan, opened in 2019, it catered to Michigan’s medical marijuana market, and business was booming. Recreational marijuana sales began later that year statewide, opening the door to new customers — and competitors.

As the state's cannabis market took off, new operators flooded in and profit margins thinned.

"We’re oversaturated," said Jerry Millen, owner of Greenhouse. "Too much product, too many stores to the point where people are just giving the product away."

Michigan’s marijuana industry is showing signs of strain as companies deal with oversupply, falling prices and tightening margins. And it's forcing some operators to scale back or shut down entirely: the most notable recent retreat from the once-booming Michigan market is Canadian cannabis giant TerrAscend.

In late June, the publicly traded corporation announced its "strategic exit" from Michigan, declaring it intended to sell or divest all its assets in the state, which include four growing facilities, 20 dispensaries and real estate. The net proceeds from that pullback, the company said, would be used to pay down its debt.

TerrAscend officials declined comment for this story. However, in the company's June statement, Executive Chairman Jason Wild said: “Michigan is an extremely difficult market and we have to come to the realization that our resources can be better utilized in other markets. This move will unlock value for TerrAscend and its shareholders.”

The industry's retreat has hit the college town of Ann Arbor, too. Dispensaries Arbors Wellness, Leaf and Bud, and Misty Mountain have all recently closed. TerrAscend's Cookies location in Ann Arbor is set to close on Aug. 31, a front desk worker said.

Sales slump

According to Michigan's Cannabis Regulatory Agency, in June 2025, both medical and adult-use recreational marijuana sales declined from the previous month. Medical sales fell 12%, from $553,315 in May to $487,087 in June. Adult-use sales dropped 4.2%, from $272.1 million to $260.6 million for the same period. Combined cannabis sales totaled $261.1 million in June, down $11.5 million, or 4.2%, from May.

For the first six months of 2025, total cannabis sales were $1.58 billion, down $10.4 million, or 0.7%, from the same period in 2024. Adult-use sales totaled $1.57 billion, compared to $1.58 billion the year before. Medical sales dropped sharply, falling 72% from $12.7 million in the first half of 2024 to $3.5 million in 2025.

A slowdown in sales could be due to a number of factors, said Aidan Bergsman, data scientist and senior analyst for Anderson Economic Group. Cannabis sales in Michigan began to plateau around August 2024, coinciding with the launch of Ohio’s recreational market.

“You had a lot of Ohio residents crossing over to Michigan, especially for adult-use products,” Bergsman said. “When Ohio legalized and implemented their program, that cross-border activity decreased, and that definitely shows up in Michigan’s numbers.”

There’s also a shift from traditional retail outlets toward home cultivation and getting cannabis from friends or family, he said. There also might be cases where consumers are choosing between marijuana and alcoholic beverages, due to limited budgets.

"Consumers only have so much that they're spending on these types of products,” he said.

What’s left are too many marijuana businesses for too few customers. As a result, some companies feel pressure to reduce prices or to sell inferior products, said Greenhouse’s Millen. That’s not sustainable.

“You get what you pay for,” he said. “If people want cheap weed, I get it, I get it. But there's a lot of good products out there that are not super cheap, but they're a better product. And I think you get what you pay for.”

Millen said revenue at his store has fallen about 50% so far, with profits down about 70% over a two-year period. He's been able to maintain his business due to a loyal customer base.

“I'm just glad that we're profitable," he said. "Because 90% of these people in Michigan right now, I guarantee you are not profitable. And how long can that sustain for? Everybody's waiting for the big break. What's the big break? The big break is going to be when half the businesses go out, unfortunately. And it's going to happen.”

Vendors are begging him to carry their products, he said: “I feel terrible that I can't buy it. Because if I can't sell it, I can't buy it.”

Nick Hannawa, vice president and part-owner of Puff Cannabis, said prices have dropped significantly, allowing customers to buy much more for the same amount of money compared to a few years ago. The company has 11 dispensaries in Michigan, according to its website.

"One vape purchase back in 2019, let's say, it was $50," he said. "Today, that same vape cartridge, you can get six of them for $50. Let's say that $100 that you spent in a retail store in 2019, 2020 — that $100 would be max four items. Today that same $100 will get you 10 items, for example. Whether that's gummies, whether that's vapes, whether that's chocolate bars or joints, or whatever it may be."

Puff Cannabis started in Bay City in 2019, when the market was still limited and few licenses were issued. It was among the first recreational cannabis stores in the state, which helped attract customers from across Michigan and neighboring states, Hannawa said.

"We've been able to weather the storm," he said. "Puff has been able to weather the storm because we do high volume, and we built a culture and a brand that people come back to. Like our Puff rewards program is a big deal, so we're able to retain the customer."

'Not a good look'

TerrAscend said its exit from Michigan would likely be completed by the “second half of 2025." It comes with a 21% downsizing of the firm’s 1,200-person workforce. The company operates 20 dispensaries and four cultivation sites across the state, including locations in Detroit, Ferndale, Warren and Harrison Township.

Wild said the company would pivot to concentrating its “efforts and resources in the Company’s core northeastern U.S. markets,” of New Jersey, Maryland, Pennsylvania and Ohio.

Several TerrAscend dispensaries are preparing to close across Metro Detroit. An employee at Cookies in Oxford said the store’s last day was July 30. Staff at Lemonnade in Center Line and Gage Cannabis in Adrian said their locations will close on Aug. 31. A front-desk worker at Cookies Detroit said she wasn’t sure when that location would shut down.

Departures like TerrAscend’s hurt Michigan’s image, Hannawa said: "For this big publicly traded company to come in and do this and then have to exit out of the market, it's not a good look for us. It doesn't put the Michigan market in a good light, because it's showing that it's weak, because these guys are leaving."

Pricing has a big impact. The decline in pricing not only impacts retailers, Hannawa said, but it also affects growers and processors because they’re forced to sell their products for cheap. The drop in prices also slows repeat business because customers don't have to visit the store as often.

"We don't want to see growers shuttering their doors," he said. "We don't want to see processors losing money or farmers losing money. We kind of want everyone to be successful."

A 'very difficult market'

Kevin Sabet is the director of the advocacy organization Smart Approaches to Marijuana, which aims to curb the commercialization of marijuana. The group likens the marijuana industry to “Big Tobacco,” arguing it prioritizes profits over consumers’ health as cannabis products become increasingly potent.

The retreat from the Michigan market by cannabis giants is consistent with a national trend, Sabet said. General oversaturation of the country’s marijuana market is causing similar pullbacks in other states previously seen as gold mines for legal cannabis sellers, like California.

Part of the issue is inherent to the plant, he said. The marijuana market is “very difficult” because the plant “grows everywhere.”

“That’s why it’s called ‘weed,’” Sabet said.

Another challenge, he said, is that legal marijuana sellers must compete with black-market sellers, who don’t face regulatory burdens like licensing and taxes. Those illegal sellers include criminal enterprises based in foreign countries like Mexico, Colombia and China that run illegal “grow operations” in the United States and traffic the product here.

“So if you were going to be able to have illegal entities undercut the taxed, legal product, you were going to have a successful business on the illegal side,” Sabet said.

Sabet, who served as a drug policy adviser to three U.S. presidents, said he and others could see the marijuana industry’s woes coming from a “mile away.”

“We’ve never regulated something dangerous very well in this country,” he said.

Ideas for aiding the industry

As challenges continue, Michigan's cannabis business owners have a few ideas for how to help the industry.

Hannawa said he would like to see the state act to stabilize Michigan’s cannabis market. He wants to see price increases so businesses can remain profitable and a halt to new licenses.

"Giving out more licenses in Michigan doesn’t make any sense anymore," he said. "We have enough processors. We have enough growers.”

Millen said he would like to see federal legalization, which would result in tax savings for marijuana businesses. He said there should be fewer licenses and stores, with support for knowledgeable local businesses rather than corporate operators.

He's also calling for lawmakers to work with industry entrepreneurs to create fair, realistic regulations: "The lawmakers need to sit down with people like myself and other good players for this industry, and talk to us about what needs to change."

Millen also has a message for consumers.

"Find out who and where you're buying your cannabis from and what they stand for," he said. "If you truly believe in what you're buying, you should know that you're buying from good people."

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