Michigan is the clearest preview of where every mature cannabis market is headed. Sales climbed every year from the 2019 adult-use launch until 2025, when the market recorded its first annual decline. An ounce of flower now sells for about sixty dollars. There are more than 800 licensed retailers, and since January a 24% wholesale tax has been squeezing margins further.
In a market like that, the old dispensary playbook stops working. Opening the doors and posting a weekly deal no longer fills the store, and you cannot discount your way out of a price war that is already at the floor. This guide covers what does work in Michigan: protecting margin by keeping the customers you already have, staying inside the Cannabis Regulatory Agency's advertising rules, and running a regional strategy that fits Detroit, West Michigan, college towns, up north and the border.
Michigan's Market by the Numbers
According to the Cannabis Regulatory Agency's monthly reports, Michigan's adult-use retailers sold $3.17 billion in 2025, down from $3.27 billion in 2024. It was the first full-year decline since recreational sales began in December 2019. Through the first half of 2026, adult-use sales totaled roughly $1.48 billion, and August 2026 came in at $258.8 million. Cumulative legal sales, adult-use and medical combined, passed $17 billion this summer.
Volume did not fall. Price did. Michigan's growers produced more flower than ever in 2025, and stores moved 108,719 pounds of it in August 2026 alone. The average retail ounce of adult-use flower fell from $95.08 in December 2023 to $69.20 in December 2024, and to a record low of $58.20 in December 2025. It has hovered around $60 since.
The store count tells the other half of the story. Michigan had 845 licensed adult-use retailers as of August 31, 2026, out of 2,155 active adult-use licenses. That is more retail doors chasing a pool of revenue that has stopped growing. Medical facility sales, meanwhile, were under $300,000 in August, a rounding error next to adult-use. Michigan is a consumer market now, and your marketing should be built for that consumer.
The Michigan math: When the average ounce drops by a third and the number of stores keeps rising, the revenue per store falls even if total volume holds. The only lever that does not cost you margin is visit frequency from customers you already have.
Why Price Compression Breaks the Old Playbook
In a young market, a new store can win with a grand-opening offer and steady walk-in traffic. In Michigan, every customer within driving distance has several stores to choose from, and most of them are running a deal today. A discount does not differentiate you. It trains your customers to wait for the next one and lowers the margin on the visits you would have gotten anyway.
The dispensaries holding their ground in Michigan have made a different bet. They compete on the relationship instead of the shelf price:
- They know who their customers are. Every purchase is tied to a phone number or email in the POS, so the store can see who visits weekly, who has slipped to monthly and who has not been back in 60 days.
- They reward frequency, not just spend. A loyalty program that rewards the third visit in a month keeps a customer from splitting purchases across three stores.
- They market to segments. A lapsed customer gets a winback sequence. A top spender gets early access through a VIP tier. A new customer gets a welcome series. Nobody gets the same blast.
- They protect margin on the deal calendar. Offers go to the segments that need a reason to return, not to the regulars who were coming in on Friday anyway.
Across the 23 dispensary programs in our 2026 benchmarks report, loyalty members drive a median of 57.4% of store revenue. In a price-compressed market, that member base is your moat. It is the share of revenue a competitor cannot take with a cheaper ounce.
Audit your deal calendar first. Pull last quarter's promotions and check who redeemed them. If most redemptions came from customers who visit weekly, you paid for visits you already had. Move those offers to lapsed and new-customer segments, and give regulars recognition (early access, points multipliers) instead of discounts.
The 24% Wholesale Tax and Your Marketing Budget
On January 1, 2026, Michigan's new 24% wholesale tax on marijuana took effect, passed as part of a road-funding budget deal. It sits on top of the existing 10% adult-use excise tax and the 6% sales tax. January sales dropped sharply from December, February was on pace for the lowest monthly total since late 2022, and two lawsuits challenging the tax are working through the courts. As of this writing, the tax remains in effect.
Whatever happens in court, the effect on operators is immediate: less margin per transaction and more pressure to cut spending. Marketing is usually the first line item cut, and that is the wrong instinct. Cutting acquisition spend that is not working makes sense. Cutting retention spend, the programs that bring existing customers back, accelerates the problem the tax created.
Where to spend when margins shrink
- Owned channels first. Email and SMS cost cents per send and reach customers who already chose you. Across our benchmark programs, the median revenue per SMS sent is $1.86 and per email sent is $0.77, at a fraction of the cost of paid reach.
- Automations before campaigns. Welcome, birthday, post-purchase and winback flows run every day without new creative. Build them once and they keep earning.
- Paid acquisition only where it is measured. If you run geofencing or programmatic campaigns, require store-visit attribution. Michigan margins cannot fund awareness you cannot measure.
CRA Compliance: The Rules That Shape Every Campaign
Michigan's marketing and advertising rule, Mich. Admin. Code R 420.507, is shorter than many states' rules, but it applies to every channel you use: email, SMS, social, your website, signage and paid media. Here is what it requires, in plain language. This is not legal advice, so have your compliance counsel review your templates.
Audience composition
You may not advertise to the public unless you have reliable evidence that no more than 30% of the audience for that program, website or publication is expected to be under 21. Adult-use products must be marketed only to people 21 and older, and sponsorships aimed at people under 21 are prohibited. For digital campaigns, that means age-gated landing pages, 21+ targeting on any paid platform, and age confirmation on every signup form.
Required warnings
Advertising must carry the warning statements the rules require for marijuana products. Put them in your email footer template and your SMS program disclosures so they ship with every message automatically, rather than relying on whoever builds the campaign to remember.
No health claims, nothing misleading
Marketing may not claim health or health benefits unless the claim meets narrow FDA standards, and it may not be false, deceptive or misleading. That covers subject lines and product descriptions. Describe products by strain, effect profile as reported by the brand, potency and price, never by condition.
Medical vs. adult-use language
Products sold under the medical program must be marketed as "medical marihuana" to registered patients and caregivers only. Adult-use products are marketed as "marihuana" to adults 21 and older. If you still run both, keep separate segments and separate templates.
The word "dispensary"
This one surprises most operators. The CRA has told licensed adult-use retailers and medical provisioning centers that they may not refer to themselves as a "dispensary" in advertising or marketing, or use related terms like pharmacy, apothecary or drugstore. The restriction comes from the Michigan Public Health Code, which reserves "dispensary" for licensed pharmacy operations. Your signage, site copy, ads and messages should use "cannabis retailer," "provisioning center" or simply your brand name.
That creates a real search problem, because shoppers search for "dispensary near me" by the hundreds of thousands. The answer is to win local search on the signals you control: a complete Google Business Profile in the right category, a steady flow of reviews, accurate menu listings and location pages that answer what shoppers actually ask. Talk to counsel before using the word anywhere in your own materials.
Local ordinances
Advertising must also comply with your municipality's sign and advertising ordinances, which vary city by city. A billboard or window sign that is fine in one city can violate the rules in the next town over.
Make compliance part of the template. Build the warning statements, 21+ language and opt-out instructions into your email and SMS templates once, and add a short copy checklist (no health claims, no "dispensary," 21+ only) for anyone writing campaigns. Compliance that lives in the template does not depend on memory. For SMS consent rules, see our TCPA compliance guide.
Five Michigan Markets, Five Strategies
Michigan is not one market. A store in Ferndale and a store in Petoskey face different customers, different competition and different calendars. Running the same campaign statewide wastes money in at least one of them.
Detroit metro
Wayne, Oakland and Macomb counties have the densest competition in the state, and customers can reach several stores in a short drive. Detroit-area stores need the strongest retention engine: high capture rates at checkout, a loyalty program that rewards frequency, and weekly segmented sends. See our Detroit cannabis marketing page for local detail.
West Michigan
Grand Rapids, Kalamazoo and Muskegon are less saturated than metro Detroit but filling in quickly. This is the window to build a list before competitors do. A customer you enroll this year is far cheaper to keep than one you have to win back from a new store down the road.
College towns
Ann Arbor, East Lansing and Mount Pleasant run on the academic calendar. Plan around move-in, football weekends and the summer drop. Students turn over every year, so list growth and welcome flows matter more here than anywhere else in the state.
Up north and the Upper Peninsula
Traverse City, Petoskey, Mackinaw and the U.P. swing with tourism. Summer and ski season bring visitors, while the shoulder months depend on locals. Capture visitors on the first visit, then market to them differently: a summer visitor wants to know what is new before next season, while a local wants the weekly deal.
Border towns
Stores near the Indiana, Ohio and Wisconsin borders have long served out-of-state visitors. That traffic is less reliable than it looks. Ohio's Senate Bill 56, signed in December 2025, made it an offense for Ohioans to possess cannabis bought in another state, which puts pressure on stores around Monroe and the Toledo corridor. The durable play for border stores is to grow the in-state customer base and convert visitors who do come in into loyalty members, not to build a business on cross-border trips. We advise against aiming paid campaigns at residents of states where adult-use cannabis is not legal.
Segment by region, not just by behavior. If you run more than one Michigan location, tag every customer with a home store and build campaigns per market. A tourist-season campaign up north and a frequency campaign in Oakland County should never be the same send.
What Good Looks Like: Retention Benchmarks
Before you change anything, find out where your program stands. These are the benchmarks from our 2026 report, built from 23 managed dispensary programs and more than 370,000 loyalty members. Enter your own numbers in the checker below the table to see which quartile you fall in.
| Metric | Bottom 25% | Median | Top 25% |
|---|---|---|---|
| Email Open Rate | 12.7% | 19.6% | 29.2% |
| Revenue per Email Sent | $0.41 | $0.77 | $1.87 |
| Revenue per SMS Sent | $1.24 | $1.86 | $2.61 |
| Loyalty Active Member Rate | 12.1% | 21.2% | 33.7% |
| Member Revenue Share | 44.1% | 57.4% | 95.6% |
| Average Order Value | $54.21 | $61.15 | $67.72 |
Source: Gold Standard Solutions 2026 Cannabis Email Marketing Benchmarks Report, 23 managed dispensary programs.
In Michigan, two of these numbers deserve the most attention. Loyalty active member rate shows whether your program actually changes behavior or just collects phone numbers. Member revenue share shows how much of your revenue is protected from the store down the street. If either is in the bottom quartile, fix it before you spend another dollar on acquisition. To put a dollar value on a customer, run your numbers through the LTV calculator.
The 90-Day Michigan Plan
If your store has no structured retention program, or one that has not been touched in a year, this is the sequence we would run.
Days 1-30: Data and compliance foundation
- Connect the POS to your marketing platform. Use a cannabis-friendly platform (see our platform guide) so every transaction ties back to a customer record.
- Fix capture at checkout. Give budtenders one enrollment script, offer a reward on the next visit rather than a discount today, and track capture rate by employee each week.
- Rebuild templates for CRA rules. Warning statements, 21+ language, opt-out instructions and no "dispensary" anywhere in your own copy.
- Clean the list. Remove hard bounces and confirm consent records before you send anything new.
Days 31-60: Automations that run every day
- Welcome series for new members, built to earn the second visit within two weeks.
- Winback flow for customers who have not visited in 45 to 60 days, with the offer reserved for this segment only.
- Birthday and post-purchase messages, which have the highest open rates and need no weekly effort.
Days 61-90: Segments, regions and the deal calendar
- Build core segments: new, active, lapsed, VIP and, for multi-store groups, home store by region.
- Move promotions to the segments that need them and replace blanket discounts for regulars with early access and points multipliers.
- Measure monthly: attributed revenue per send, active member rate and member revenue share against the benchmarks above.
The 90-day checkpoint: By the end of the third month you should see a rising capture rate, a welcome series opening well above your broadcast average, and measurable monthly revenue from automations alone. If you do not, the problem is usually capture at the register or a platform that is not tied to the POS.
Frequently Asked Questions
No, according to the Cannabis Regulatory Agency. Licensed adult-use retailers and medical provisioning centers may not refer to themselves as a "dispensary" or use the word in advertising and marketing, and related terms like pharmacy, apothecary and drugstore are also off limits. The restriction comes from the Michigan Public Health Code, which reserves those terms for licensed pharmacy operations. Use "cannabis retailer," "provisioning center" or your brand name, and confirm your materials with compliance counsel.
Under Mich. Admin. Code R 420.507, marijuana advertising must not be false or misleading, must not make health claims outside narrow FDA standards, and may only run where the advertiser has reliable evidence that no more than 30% of the audience is under 21. Adult-use products may only be marketed to adults 21 and older, required warning statements must be included, and all advertising must also follow local sign and advertising ordinances.
Michigan's adult-use retailers sold $3.17 billion in 2025, the market's first annual decline, and about $1.48 billion in the first half of 2026. August 2026 adult-use sales were $258.8 million, with an average retail ounce of flower at $60.33 and 845 licensed adult-use retailers statewide, according to the Cannabis Regulatory Agency.
The tax, in effect since January 1, 2026, cuts margin on every transaction and pushes operators to reduce spending. The smartest cuts are unmeasured paid awareness, not retention. Email, SMS and loyalty automations cost very little per message, bring back customers who already chose your store, and protect revenue that discounting would otherwise give away.
By competing on the relationship instead of the shelf price. That means capturing every customer at checkout, rewarding visit frequency through loyalty, segmenting offers so discounts go to lapsed and new customers rather than regulars, and measuring member revenue share. Across the 23 programs in our benchmarks report, loyalty members drive a median of 57.4% of store revenue.
Running a Michigan store? We will benchmark your current email, SMS and loyalty program against the numbers above, flag anything that conflicts with CRA rules, and map out the 90-day plan for your market. Book a free strategy call.