The Michigan adult use market is one of the fastest growing cannabis markets in the United States
A bright spot of the United States (US) cannabis industry has been the performance of Midwestern states that allow for the sale of recreational cannabis.
Although we are favorable on the medical cannabis opportunity in the Midwest, recreational cannabis is becoming big business in several major US markets and we are bullish on the growth prospects that are associated with it. In April, the Illinois Department of Financial and Professional Regulations (IDFPR) reported more than $130 million of recreational cannabis sales. When compared to March, the state reported almost $1 million more of recreational cannabis revenue in April which is first time it reported more than $130 million of recreational sales in back-to-back months. According to data from Michigan, the state set a new record for cannabis sales in April and reported almost $200 million of cannabis purchases. Based on the state’s data, recreational cannabis accounted for approx. $168 million of sales while medical cannabis accounted for approx. $27 million of sales. (Technical 420)
In late 2019, Michigan started to allow for the sale of recreational cannabis and we have been impressed with the amount of consumer demand for cannabis in the state since the start of the program.
According to state data, Michigan sold more than $1.3 billion of recreational cannabis and $481 million of medical cannabis in 2021. Over the course of the year, the recreational cannabis industry recorded strong growth and we are bullish on the trend. In December 2021, Michigan reported more than $135 million of recreational cannabis sales which was a record for the state at the time.
During the last year, the US cannabis industry has come under heavy pressure and we are surprised by the trend due to the growth we are seeing from states like Michigan. According to the Marijuana Policy Project, states that legalized recreational cannabis generated more than $3.7 billion in tax revenue in aggregate from recreational cannabis sales in 2021.
From rising national debt levels to higher interest rates, we believe the US economy is facing significant headwinds. Many states have been forced to cut costs due to higher debt levels and we believe the legalization of cannabis could open up resources and create new taxable revenue streams for states.
Earlier this month, we highlighted Body and Mind (CSE: BAMM) (OTC: BMMJ) as a US multi-state operator that is flying under the radar and is capitalizing on Michigan. We believe the market underappreciated the company’s leverage to recreational cannabis markets like California, Michigan, and Nevada. Click here to view the entire article.