Cannabis Pricing Wars: How Mature Markets Like Michigan Are Reshaping the U.S. Landscape

The cannabis industry in the United States is evolving rapidly, and nowhere is this more apparent than in mature markets like Michigan. With an average ounce of cannabis flower now costing as little as $83.71—an 80% drop since 2020—Michigan exemplifies how market maturity can drastically reshape pricing dynamics. These changes aren’t just affecting local consumers; they’re rippling across state lines, influencing neighboring markets and consumer behavior nationwide.

Michigan’s adult-use cannabis market has grown substantially since its launch in December 2019. By 2024, the state boasted over 1,000 licensed growers, 843 dispensaries, and a production volume exceeding 103,000 pounds of cannabis flower sold monthly. This explosion in supply, paired with strong competition among dispensaries, has driven prices to record lows—surpassing even older markets like Colorado and Oregon.

This affordability gives Michigan a unique competitive edge, especially for consumers in neighboring states like Ohio, where cannabis flower costs nearly three times as much. Cross-border shopping has become a growing trend, with Ohioans flocking to Michigan for better deals.

Newer markets like Ohio face significant challenges as they try to compete with mature neighbors. Ohio’s adult-use sales launched in 2024 with prices hovering around $231 per ounce, but this quickly fell to $210 within four months due to Michigan’s low prices attracting cost-conscious consumers.

Other states, like Illinois, also struggle to match Michigan’s pricing. Illinois’ more complex tax structure—including a tiered excise tax reaching 25% for high-THC products—keeps prices elevated at $257 per ounce on average. With fewer dispensaries and less competition (2 per 100,000 people compared to Michigan’s 8.4), Illinois operators are hard-pressed to lower prices without sacrificing margins.

As mature markets drive prices lower, consumer expectations are shifting. High-quality, affordable cannabis is becoming the norm in states like Michigan and Oregon, setting a standard that newer markets must meet to stay competitive. Additionally, cross-border shopping isn’t just a regional phenomenon—consumers are increasingly willing to travel for

Emerging markets like Minnesota and Delaware, slated to launch adult-use sales by 2025, may face higher initial prices due to limited supply and infrastructure.

However, as these states mature, they could follow Michigan’s trajectory of declining costs. Policymakers and operators in newer markets will need to prioritize competition and supply chain efficiency to remain competitive.

Meanwhile, federal prohibition still prevents interstate commerce, which could otherwise stabilize prices nationwide. Until that changes, mature markets will continue to wield outsized influence, setting benchmarks for affordability and accessibility.

Would You Drive to a Neighboring State for Cheaper Cannabis?