Tag: Midwest

This story was republished with permission from Crain’s Cleveland Business.

Ohio’s legal cannabis industry has generated $656.4 million in marijuana sales in the eight months since the state’s adult-use program launched in early August.

That figure represents retail sales recorded by the Ohio Division of Cannabis Control from Aug. 6, when recreational marijuana was first sold in the state by licensed dispensaries, through April 5.

Comprising that total is about $434.2 million in recreational sales and approximately $222.2 million in medical.

That means that at eight months into the availability of recreational marijuana, adult-use composes about 66% of Ohio’s legal cannabis market.

This comes on the heels of the March sales month, which saw approximately $57.5 million and $21.5 million in rec and medical sales, respectively, or more than $79 million in total between March 2 and March 29 (the state’s reporting periods don’t begin and end neatly with calendar dates).

That activity compares relatively closely with the February sales period — specifically Feb. 2 through March 1 — which included approximately $55.7 million and $22.2 million in rec and medical sales, respectively, or more than $77.8 million in total.

The market has continued to grow in line with retail prices steadily decreasing since last August.

During the first week of adult-use sales in August, the average price of cannabis flower was $26.59 per one-tenth of an ounce and $9.40 per gram, according to DCC. Manufactured products cost an average of $31.06.

Between the week of March 30 through April 5, prices on average for cannabis flower stood at $19.77 per one-tenth of an ounce — a nearly 26% decrease since early August — and $6.99 per gram. Manufactured products cost $28.57 on average.

Legal cannabis was first sold in Ohio under the medical program in January 2019. Since then, the state has generated more than $2.5 billion in marijuana sales.

And while the market continues to grow at a good clip, the industry is operating at a fraction of the size of neighboring Michigan. Of course, that market is grappling with some challenging industry dynamics, including an oversupply of product and business licenses. Those factors have been contributing to business failures and the lowest prices for legal cannabis in the country.

According to data from Michigan’s Cannabis Regulatory Agency, the average retail price for flower in that state had cratered to $85.55 per ounce in March.

Nonetheless, Michigan has generated just shy of $2 billion in licensed cannabis sales in just the first three months of this year.

That’s a stark contrast to Ohio, where cannabis sales topped $2.5 billion in six years and four months.

Ohio’s legal cannabis industry is clearly losing an unknown chunk of business to Michigan as consumers here cross the border for cheap products.

The Drug Enforcement Policy Center at the Ohio State University’s Moritz College of Law noted this in its 2024 cannabis customer survey and analysis of the medical marijuana program. In that, 9% of respondents said that they were exclusively going to dispensaries in other states for medical marijuana, and 34% said they do that some of the time.

The post Recreational cannabis continues to fuel Ohio sales numbers appeared first on Green Market Report.

This article is reprinted with permission from Crain’s Detroit Business.

Shenzhen, China, is more than 7,800 miles from Michigan. But the location of the mainland city of 17.6 million people is about to be a big problem for that state’s legal cannabis market.

Manufacturers in the city produce all of the hardware for vapes — a popular product category, as Michigan cannabis operators sold an eye-watering 53.83 million vapes last year, according to data from industry analysis firm Headset.

Vape hardware suppliers are now swept up in President Donald Trump’s sweeping international tariffs, as the president slapped a 145% retaliatory tariff on products made in China and imported to the U.S.

“I don’t even know of a supplier that’s not in Shenzen,” said Ryan Ratzloff, founder and CEO of Lansing-based cannabis processor Lion Labs. “Our margins are as tight as can be and barely make any money in that category. So we’re not going to eat the costs, we’re going to jack up the price.”

Lion Labs, which sold 200,000 cannabis vapes last year under its high-end Element brand name, sources its vape hardware from Seattle-based Active Vapor Devices, one of the largest importers in the sector.

Lion Labs pays $3.50 per vape hardware and puts its live rosin cannabis oil in the hardware, packages the product and distributes to dispensaries. Ratzloff said it’s a thin margin for the product, even though Element’s vape products retail for upwards of $40 and a 145% additional cost on the product would push Lion Labs’ sourcing to $8.57 per unit.

That translates to an additional $1.02 million in costs.

For House Brands Distro, the processor for Detroit-based House of Dank, the costs go even higher.

The brand produces around 500,000 vapes a month, said Travis Murphy, a buyer for company. Even if they sourced their hardware from China for $1 each, the additional cost would be $1.23 million per month, or nearly $15 million annually.

Ultimately, those costs would be passed down to the consumer. In March, the average cost of a cannabis vape was just $9.37, the lowest cost on record. If the average cost to import vape hardware $2 per unit, that cost rises to $4.90, pushing the consumer price in accordance to $12.27 after the tariff.

In the meantime, the industry is negotiating with suppliers and trying to find ways to cut costs to help absorb some of the tariff costs.

Ratzloff said Active imported as much vape inventory as possible ahead of the April 9 effective date of the tariffs.

Murphy said suppliers had been pressuring him to take similar steps.

“It’s all up in the air,” Murphy said. “So far we haven’t seen a rise in costs from the tariffs. We don’t know if they (suppliers) will absorb them or not. Right now the biggest adjustment is the level of priority we’re giving to ordering and trying to get goods in country before it gets worse.”

But, ultimately, it’s unclear how much pricing will be impacted.

All sides of the industry are waiting to Trump or China President Xi Jinping to blink and avert the coming chaos of a trade war.

Robin Schneider, executive director of the Michigan Cannabis Industry Association, told Crain’s many of its members have secured assurances from their suppliers in Shenzhen that they would absorb the tariff cost.

“So far several vape hardware and packaging suppliers have reassured our members that the factories will be paying for the tariffs,” Schneider wrote in an email. “With that said it’s too early in the process to predict the financial impact tariffs will have on our industry.”

How long that grace lasts is unclear.

Ratzloff said Lion Labs isn’t waiting around to find out. It’s already looking to change its vape packaging, which is also largely imported, to cut costs.

Changing from a box for its Element vapes to a Mylar package with a sticker will save Lion Labs $100,000 a year, Ratzloff said.

But Ratzloff worries the additional costs, if and when they are passed down, will cause the already financially stressed industry to further cut corners and create a lower quality, and potentially dangerous, product.

Adult-use marijuana prices have plummeted 28% since March 2024 to an average cost of just $65.14 for an ounce of marijuana flower. Three years ago, the average price of an ounce was $184.90.

Many fear the industry is turning to less scrupulous means to make ends meet, including using illicit product or unapproved chemicals in their vapes. For instance, state regulators recalled in January 16,000 Platinum vape cartridges that contained the banned medium-chain triglyceride, or MCT oil, made by RWB Michigan, a subsidiary of multi-state operator Red White & Bloom Brands.

Processors may illegally use MCT oil in their distillate to increase margins by lowering the amount of distillate, which is created by dissolving expensively grown cannabis.

“If you’re on the ropes, you’re going to have to do something and it’s cut corners,” Ratzloff said. “This is going to end up with the customer paying more and getting a less quality product.”

The post Cannabis vape companies hit hard by tariffs – compounding headwinds in Michigan appeared first on Green Market Report.

The Minnesota Office of Cannabis Management announced Monday that its final cannabis rules have been published in the state register, officially putting them into effect after receiving approval from an administrative law judge earlier this month.

“The adoption of rules is the most significant step to launching the cannabis market because the office cannot issue business licenses until they are in place,” Interim Director Eric Taubel said in a statement.

The state can now begin issuing licenses to applicants who have completed all necessary application steps. More than 600 qualified social equity applicants who advanced from last fall’s preapproval process are first in line to receive business licenses after completing requirements including background checks, labor agreements and local government approvals.

However, an industry insider told FOX 9 that license applicants are still waiting to reach the third step in the application process, and forms for that step aren’t yet available. That applicant estimates it could take the state at least another month to complete the licensing process.

Even after licenses are issued, Minnesota still has some kinks to work out in launching its market. The state requires cannabis businesses to use Minnesota-grown products, but large-scale cultivator licenses are capped at 50. According to FOX 9, the Office of Cannabis Management previously estimated Minnesota would need “1.5 to 2 million square feet of canopy” to meet cannabis demand, while currently there is only about 60,000 square feet.

Last week, a state judge ordered regulators to hold a lottery for 182 social equity licenses among 648 verified applicants, Green Market Report wrote at the time. The lottery must occur before proceeding to general permitting for non-equity candidates.

Several license categories also remain capped through July 1, 2026, including mezzobusiness (100 licenses), cultivator (50 licenses), manufacturer (24 licenses) and retailer (150 licenses). Uncapped license categories include microbusiness, wholesaler, transporter, testing facility and delivery service.

“It was important for us to preserve early-mover advantages for social equity applicants envisioned by the Legislature,” Jess Jackson, the office’s director of social equity, said in the news release. “By ensuring the applicants who qualified during license preapproval have the first chance at licenses once rules are approved, we are continuing to prioritize social equity in every stage of licensing.”

The OCM has around 3,500 total business license applications to process, with additional lotteries for capped license categories expected to take place this summer.

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Avicanna Inc. (TSX: AVCN) (OTCQX: AVCNF) posted fourth-quarter revenue of $6.6 million for the period ending Dec. 31, 2024, wrapping up a year of some stability in the Canadian biopharmaceutical company’s commercial ventures.

Still, it posted a fourth-quarter net loss of $440,094, a significant improvement versus the $2.4 million loss reported in the same quarter of 2023, according to filings. The fourth quarter capped a year of consistent quarterly performance, with revenue ranging from $6.1 million to $6.6 million across the four quarters.

“We are proud to report our most successful year to date, marked by improved financial results and continued advancements in our commercial, R&D and clinical programs,” CEO Aras Azadian said in a statement. “In 2024, we strengthened our financial foundation, achieved self-sufficiency, and established a solid basis for further growth, international expansion, and innovation.”

The Toronto-based cannabinoid-focused firm achieved $25.5 million in annual revenue, a 52% rise from 2023. For the full year, Avicanna saw its gross profits reach $12.9 million, up 94% from 2023, while gross margins improved to 51% from 40% a year earlier. The company still reported an annual net loss, though it narrowed considerably to $4.7 million from $6.6 million in 2023. Adjusted EBITDA loss improved by 68% to $1.4 million versus a loss of $4.3 million in 2023.

A big portion of Avicanna’s revenue came from its MyMedi.ca platform, which was acquired from Shoppers Drug Mart in 2023. It generated over $21 million in gross revenue during 2024. The platform, operated by Northern Green Canada Inc., functions as a medical cannabis care service providing products, bilingual pharmacist-led patient support and educational resources.

The company’s Canadian operations continued to be the primary revenue driver, ending the year with 42 proprietary commercial SKUs and 136 unique commercial listings, it said. The company sold around 200,685 wholesale units in 2024, an 8% increase from the previous year.

International sales

International revenue grew to $1.9 million, a 428% increase from $364,419 in 2023, driven by new licensing and supply agreements.

The company saw several operational achievements during 2024, including the start of a real-world evidence study aimed at enrolling 1,000 patients to “better understand the potential therapeutic use of medical cannabis,” led by the head of the Canadian Pain Society.

The firm also obtained drug registration in Colombia for Trunerox, a proprietary oral formulation with 10% CBD for treating severe seizures related to Lennox-Gastaut Syndrome and Dravet Syndrome. The company plans to commercialize Trunerox in Colombia in 2025, where it expects it to be covered by insurance.

Throughout the year Avicanna repaid an outstanding principal balance of $1.3 million on its non-convertible debentures issued in August 2023 and raised additional capital through private placements.

The company ended the year with a cash balance of $448,028, slightly lower than the $477,198 reported at the end of 2023. Last month, the company applied for and was granted a Management Cease Trade Order due to delays in meeting deadlines for certain statutory filings.

The post Avicanna caps record year of sales as it swims out of the red appeared first on Green Market Report.

This article is reprinted with permission from Crain’s Detroit Business.

Michigan marijuana prices stabilized in March as sales recovered from a three-month slide.

The average price for an ounce of adult-use marijuana flower dropped only a tenth of a percent in the month to $65.14, the smallest slide since 2020. In February, the price dropped 2.2% and the price remains down more than 28% year-over-year.

Sales also recovered in March. The state’s legal industry recorded $276.95 million in sales, up 14.5% from February, according to newly released data from the Michigan Cannabis Regulatory Agency.

Sales growth occurred in all sales categories but the largest growth was in adult-use marijuana flower. The industry sold 15,000 more pounds of adult-use flower in March to the tune of $121.5 million, up nearly 15% from February.

But it’s not all good news. Year-over-year sales also remain down.

Through the first quarter of 2025, the legal market is trailing last year’s sales by nearly $26.5 million, hinting that the state’s regulated marijuana market may have peaked at $3.3 billion in sales last year.

If the sluggish sales continue, the state is on pace to only reach $2.94 billion in products sold – its lowest total since 2022 and the first year-over-year drop since legal sales began in late 2019.

And product oversupply remains a major problem The inventory of fresh frozen flower – product that is usually grown outside during the summer months, harvested in October and distributed around the year for infused liquids and edibles – remains historically high, driving down prices.

On March 31, growers and processors had 1.47 million pounds of fresh frozen marijuana flower in inventory.

That’s nearly 10% down from the 1.63 million pounds of fresh frozen on supply at processors and growers in February, but 316% above the 353,587.39 pounds of inventory in March of last year.

And the state continues to issue licenses. The CRA issued 35 prequalifications, mostly for growers, along with nine grower licenses and seven processor licenses in March, but only eight more retail licenses to sell the product.

Meanwhile, industry operators are collapsing under the pressure.

In January, Bay County marijuana operator Pincanna temporarily shuttered 31,500-square-feet of its grow facility and laid off employees to mitigate losses. Chicago-based PharmaCann shuttered its 207,000-square-foot LivWell Michigan cultivation site in Warren, laying off 222, in January. And last November, Fluresh shuttered its $46 million, 105,000-square-foot grow facility in Adrian.

Ohio’s legal market – sales began in September last year – is also beginning to cut into Michigan’s market.

Ohio’s legalized adult-use recreational market sold more than $242 million of product in the four months last year.

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