TerrAscend’s exit, cultivation facility closures and hundreds of lost jobs are raising questions about whether Michigan’s cannabis market has become too competitive for many operators to survive.
ANN ARBOR – When one of North America’s largest cannabis companies decides it can no longer make money in Michigan, policymakers should pay attention.
Last year, TerrAscend Corp., one of the nation’s largest multi-state cannabis operators, announced it would exit Michigan entirely after determining the state had become “an extremely difficult market.” The company moved to divest 20 dispensaries, four cultivation and processing facilities, and related real estate holdings while redirecting investment to Ohio, Pennsylvania, New Jersey and Maryland.
The decision affected approximately 250 jobs and may have signaled the beginning of a broader shift within Michigan’s cannabis industry.
Since then, cultivation facilities in Webberville and Lansing have announced closures resulting in more than 150 additional job losses, fueling concerns that cannabis investment and employment may increasingly concentrate in fewer locations while smaller Michigan communities lose out.
By The Numbers
- 20 Michigan dispensaries divested by TerrAscend
- 4 cultivation and processing facilities divested
- Approximately 250 jobs affected by TerrAscend’s Michigan exit
- 62 jobs lost at C3 Industries’ Webberville cultivation facility
- Approximately 94 jobs being eliminated at Ascend Wellness’ Lansing cultivation facility
- $54,017.10 distributed per licensed cannabis retailer to municipalities and counties in March 2026
- More than $34 million collected from Michigan’s wholesale marijuana tax during the first quarter of 2026
- More than $3 billion in annual cannabis sales statewide
TerrAscend’s departure was particularly noteworthy because the company was not a struggling local operator. It was one of the largest cannabis companies in North America, with operations spanning multiple states.
“Michigan is an extremely difficult market and we have come to the realization that our resources can be better utilized in our other markets,” TerrAscend Executive Chairman Jason Wild said when the company announced its departure from Michigan.
The company said it would focus future investment in states where it expected stronger financial performance and better profit margins.
For industry observers, the announcement raised uncomfortable questions about Michigan’s long-term cannabis business climate.
If a large, well-capitalized operator with access to public markets and multiple revenue streams could not generate acceptable returns in Michigan, what does that mean for smaller independent operators?
The End Of The Growth Phase?
Michigan’s cannabis market remains one of the largest in the United States, generating more than $3 billion annually in sales.
Yet many operators argue the industry’s rapid growth phase has ended.
Unlimited cultivation licenses, aggressive expansion and years of new market entrants have created a persistent oversupply of cannabis flower. While consumers have benefited from some of the lowest prices in the nation, many growers and processors have watched profit margins shrink dramatically.
The Cannabis Regulatory Agency has repeatedly warned lawmakers that consolidation is likely.
During a 2025 hearing before the Michigan Senate Regulatory Affairs Committee, CRA Executive Director Brian Hanna said continued oversupply would force weaker operators out of the market.
“You’re going to see consolidation. You’re going to see small businesses going out of business,” Hanna told lawmakers, according to reporting by Metro Times.
Robin Schneider, executive director of the Michigan Cannabis Industry Association, has voiced similar concerns.
During debate over Michigan’s new wholesale marijuana tax, Schneider warned that companies facing declining margins would likely be forced to reduce staffing levels and close facilities.
In a March interview with WSJM Radio reported by Moody on the Market, Schneider said the industry was already experiencing facility closures and layoffs.
“We’re already seeing facility closures,” Schneider said. “Our margins are slim in the industry.”
Rural Michigan Could Feel The Impact First
While cannabis retailers are often concentrated in larger cities and border communities such as Monroe and New Buffalo, cultivation and processing facilities frequently locate in smaller communities where land is less expensive and large industrial buildings are available.
That means rural communities may be especially vulnerable if consolidation accelerates.
Stephanie Leiser, a University of Michigan public policy professor specializing in local government finance, recently told Bridge Michigan that the loss of even one major employer can have an outsized impact on smaller communities.
“In small towns, the impact of a business opening or closing is really acute, because it’s a really big swing in revenue when there’s a change,” Leiser told Bridge Michigan.
“If you only have five, losing one is a pretty big deal.”
Local Governments Have A Stake In The Industry’s Future
Local governments also have a financial stake in the industry’s future.
In March, Michigan distributed nearly $94 million in adult-use marijuana tax revenue to municipalities, counties and tribes. Communities received $54,017.10 for every licensed retail store or microbusiness located within their borders.
While substantial, the payment was down from approximately $58,229 per license the previous year, reflecting slower sales growth and increasing market pressures across the industry.
For communities that embraced cannabis as an economic development strategy, both jobs and tax revenue could be at risk if consolidation continues. A cultivation facility closure can mean dozens of lost jobs, while the loss of retail licenses can reduce annual marijuana revenue distributions that many local governments have come to rely upon.
Those concerns are becoming increasingly relevant as Michigan’s cannabis industry evolves from a fast-growing startup sector into a mature market where efficiency, scale and access to capital may determine which companies survive.
What Communities Receive Per Cannabis License
Fiscal Year Payment Per License 2024 $58,228.66 2025 $54,017.10 Change -7.2% Sources: Michigan Treasury, Michigan CRA.
Tax Debate Adds New Pressure
The industry’s challenges are unfolding as Michigan begins collecting revenue from the state’s new 24% wholesale marijuana tax.
The Michigan Department of Treasury recently reported collecting more than $34 million during the first quarter of 2026, though officials cautioned that it remains too early to draw conclusions about long-term revenue trends.
Industry groups continue to challenge the tax in court, arguing that it arrived at a time when many businesses were already struggling with oversupply, falling prices and growing competition from neighboring states.
Whether the tax ultimately proves to be a major factor in future closures remains a subject of debate.
What is becoming harder to dispute is that Michigan’s cannabis industry is entering a new phase.
The days of rapid expansion appear to be giving way to consolidation.
For rural Michigan communities that welcomed cannabis cultivation and processing facilities as economic development opportunities, the coming years may determine whether the industry’s benefits remain broadly distributed across the state — or increasingly concentrated among a smaller number of operators and locations.
If TerrAscend’s departure was an early warning sign, state policymakers may soon be forced to confront a larger question:
Part 2: Was Michigan’s cannabis industry built for growth, but not profitability?
