(MICHIGAN) - Small marijuana retailers across Michigan, including businesses in rural southern Michigan communities, are facing growing financial pressure as prices fall and new taxes take effect.
Bridge Michigan reports the state now has more than 800 marijuana stores. Industry experts say increased competition and oversupply in the market are driving marijuana prices lower across the state.
A new 24 percent state wholesale tax that took effect January 1 is also adding pressure on smaller operators. The tax comes on top of existing state marijuana taxes and has already contributed to some business closures.
Industry analysts say the market changes are likely to lead to more consolidation, with smaller retailers either shutting down or being purchased by larger companies.
Impacts could be especially significant in small towns and villages that rely on marijuana businesses for local tax revenue and economic development. Some communities have used marijuana tax dollars to help fund road repairs and other infrastructure projects.
Some state lawmakers say the market has become overcrowded and is now correcting itself. Industry insiders told Bridge Michigan that smaller rural operators are facing some of the toughest financial challenges.