Cannabis cultivators in Michigan have amassed the licenses necessary to grow more than half a million plants, leading to a surge in legal marijuana sales even as prices drop in the state.
As of July 13, medical marijuana and adult-use cannabis cultivators were licensed to grow 511,500 plants, according to media reports of data released by the state’s Marijuana Regulatory Agency. That’s an increase of 20% from June 1, when licenses to grow 426,000 cannabis plants were active in the state.
The number of licensed plants does not include plants less than eight inches tall, meaning that the total number of cannabis plants actually being grown by regulated operations in Michigan is substantially higher. The figure includes licenses for small cultivation facilities growing as many as 500 plants and large operations that have combined several licenses, allowing them to grow tens of thousands of plants at a time.
“We have growers where they just have one or two (licenses) and they’re sort of a small business but they’re fully vertically integrated and just grow for themselves,” MRA Director Andrew Briso said in June.
“And then we have growers that have multiple licenses,” he added. “I would say more than five, whose essential focus is to be a market supplier across the board and establish brands that they provide to every store.”
Pounds And Pounds Of Pot
Kevin Kuethe, the director of cultivation for Evart, Michigan-based Lume Cannabis, said that how much cannabis can be produced with one license depends on how the plants are grown.
“We can grow a pretty hefty amount of plants—about 16,000 is what we’re licensed for — and we do use most of that licensing,” he said. “Depending on your cultivation style, one plant can mean a quarter of a pound of finished product or once plant can mean … 10 pounds of finished product. It just depends.”
At Lume, plants are harvested when they are four to six feet tall. The company expects to produce more than 10,000 pounds of cannabis for the retail market this year.
“Our cultivation style in this commercial setting, we tend to run higher volume of plants and vegetate them for a shorter period of time just because in my professional experience it’s been the best return for quality and yield per square foot that we can get,” said Kuethe, who has operated commercial cultivation facilities in California, Arizona, Nevada, and Oregon.
The increase in cannabis cultivation in Michigan has led to a decrease in prices, which spiked in December after legal sales of recreational marijuana began in the state. Briso expects prices to continue to fall in the near future as the industry continues to expand.
“I think (prices) will continue to drop just in the short term because we do see increases in production on the adult-use side,” he said.
“Where it settles long term, I couldn’t really say what is going to be the price two years from now (or) five years from now when supply is adequate,” Briso added. “What we need to be cautious about and be wary of is what happened in Oregon … where the scale shifted and there was oversupply, because then the price kind of bottoms out.”
Since the legalization of recreational cannabis in December, sales of legal pot in Michigan have seen substantial growth. Weekly sales of medical marijuana have nearly doubled, while weekly sales of adult-use cannabis have jumped more than 800%. Economists from Michigan State University projected in a report released in March that sales of adult-use cannabis alone would surpass $3 billion per year within several years.
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