On Monday, June 30th, the Michigan cannabis landscape received a seismic shock as TerrAscend, a prominent North American cannabis company, announced its strategic exit from the state. This move will see the closure of all 20 of their dispensaries, including well-known names like Gage, Pinnacle Emporium, and Cookies, along with their four cultivation and processing facilities.
For many long-time cannabis enthusiasts, this news hits close to home. Pinnacle Emporium, for instance, holds a nostalgic place for those of us who made the pilgrimage to Buchanan before New Buffalo became the bustling hub it is today. It was a destination, a reliable stop on the cannabis trail. Then came the merger, the rebrand to Gage, and with it, a palpable shift in the customer experience, a feeling of something once vibrant becoming, well, muted.
This isn’t an isolated incident. We’ve witnessed a recurring pattern in the burgeoning cannabis industry: large, out-of-state multi-state operators (MSOs) entering new markets, acquiring licenses, only to later shutter operations due to what often appears to be a mix of market challenges and, frankly, poor management from the top. The allure of rapid expansion often overshadows the intricate realities of local markets.
TerrAscend’s official statement sheds some light on their decision, citing a strategic review of their Michigan business operations. The company intends to sell or divest all of its Michigan assets, with the net proceeds earmarked to pay down existing company debt. This exit is expected to be substantially completed in the second half of 2025. The move, according to TerrAscend, will allow for “concentrated growth and improved profitability in core markets” such as New Jersey, Maryland, Pennsylvania, Ohio, and California, as well as Toronto, Ontario.
Jason Wild, Executive Chairman of TerrAscend, was candid in his assessment: “Michigan is an extremely difficult market, and we have come to the realization that our resources can be better utilized in our other markets. This move will unlock value for TerrAscend and its shareholders.” While focusing on profitability is a sound business strategy, it underscores the harsh realities facing the Michigan cannabis industry.
Indeed, Michigan’s cannabis market has been grappling with significant headwinds. For months now, the state has seen a consistent decline in adult-use cannabis sales, marking the first year-over-year dip since recreational sales launched in December 2019. The primary culprit? A severe oversupply of cannabis, leading to a dramatic and continuous plunge in prices. In May, the average price of an ounce of flower hit a near-record low of $63, a stark contrast to the over $500 it commanded when legal sales began. While consumers might appreciate the lower prices, it’s a death knell for many businesses.
This price compression, coupled with the ongoing influx of new cultivation licenses (Michigan is an unlimited licensure state), creates an unsustainable environment for many operators. Even as the state’s Cannabis Regulatory Agency (CRA) issues more licenses, the overall number of active businesses remains stagnant, as struggling entities are forced to close their doors. This has led to calls from industry associations for a temporary moratorium on new grower licenses and stricter regulations on unregulated hemp-derived THC products that further saturate the market.
TerrAscend’s departure will also have a significant human cost, with an estimated 21% reduction of the company’s overall workforce, impacting approximately 250 employees by the end of the third quarter of fiscal year 2025. This ripple effect extends beyond TerrAscend, signaling a potential wave of consolidation and hardship for smaller, independent Michigan cannabis businesses that simply cannot compete with the sheer scale and capital of larger players, even as those larger players sometimes falter and retreat.
The exit of a major player like TerrAscend is a stark reminder that the “green rush” isn’t always green for everyone. It highlights the inherent volatility and challenges within state-specific cannabis markets, particularly those grappling with oversupply and declining prices. For Couch Lock’d readers and Michigan cannabis consumers, it’s a moment to reflect on the evolving landscape of our local market and what these shifts mean for the future of accessible, quality cannabis.
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