Lower Prices Continue To Draw Thousands Of Out-Of-State Consumers To Michigan Border Communities
NEW BUFFALO, Mich. — Ohio legalized recreational marijuana nearly two years ago. Illinois has operated one of the nation’s largest cannabis markets since 2020. Yet consumers from both states — along with neighboring Indiana, where recreational marijuana remains illegal — continue crossing state lines to buy cannabis in Michigan.
The reason is simple: price.
Michigan remains one of the least expensive cannabis markets in America, with flower, edibles and vape products often selling for 30% to 50% less than comparable products in neighboring states. That pricing advantage has transformed border communities such as Monroe and New Buffalo into major cannabis shopping destinations.
For many consumers, the savings can be substantial.
A cannabis ounce that might sell for $90 to $130 in Michigan often costs $150 to $220 in Ohio. Similar products frequently command even higher prices in Illinois, where state and local taxes can significantly increase the final cost of a purchase.
As a result, thousands of consumers continue making regular trips across state lines despite having legal cannabis options closer to home.
By The Numbers: Michigan vs. Ohio vs. Illinois Cannabis Markets
Metric Michigan Ohio Illinois Annual Cannabis Sales $3+ Billion $1+ Billion $2+ Billion Retail Dispensaries 800+ ~200 ~240 Cultivators Hundreds 37 ~20-25 Typical Ounce Price $90-$130 $150-$220 $180-$300 Recreational Cannabis Yes Yes Yes Major Border Market Monroe, New Buffalo N/A Chicago Area
Illinois provides perhaps the most striking comparison.
While Illinois generates more cannabis revenue than Ohio, consumers often face some of the highest marijuana prices and taxes in the Midwest. An ounce that sells for $90 to $130 in Michigan can easily cost $180 to $300 in Illinois once taxes are included.
For consumers living in the Chicago metropolitan area, a drive to New Buffalo can often save enough money on a single purchase to offset fuel costs. Those savings help explain why New Buffalo has become one of the Midwest’s busiest cannabis tourism destinations despite having fewer than 2,000 year-round residents.
Michigan’s Success Created Its Own Problem
Michigan consumers have benefited from some of the lowest cannabis prices in the country. But those same low prices have created significant challenges for cannabis businesses.
At a recent hearing before the Michigan Senate Regulatory Affairs Committee, Cannabis Regulatory Agency Executive Director Brian Hanna warned lawmakers that continued oversupply is accelerating consolidation across the industry.
“You’re going to see consolidation,” Hanna told lawmakers. “You’re going to see small businesses going out of business.”
His comments reflect a growing reality across Michigan’s cannabis sector.
Despite generating more than $3 billion in annual sales, many growers and retailers continue struggling with shrinking profit margins. Several cultivation facilities have reduced operations, laid off workers or closed entirely over the past year as wholesale prices continued to fall.
The state’s new 24% wholesale cannabis tax has added another financial challenge for operators already coping with razor-thin margins.
For many retailers, out-of-state customers have become increasingly important to maintaining sales volume.
Monroe Became Michigan’s Cannabis Gateway To Ohio
No community illustrates the phenomenon better than Monroe.
Located just north of Toledo, Monroe has evolved into one of the most concentrated cannabis retail markets in the United States. Dispensaries line major commercial corridors and openly market to Ohio consumers looking for lower prices and broader product selections.
Ohio license plates are a common sight in parking lots throughout the city.
The influx of customers has generated millions of dollars in sales and significant local tax revenue. While traffic has increased, Monroe residents generally appear to have accepted cannabis retailing as another part of the city’s commercial landscape.
For dispensary owners, Ohio shoppers remain a critical source of business even as Ohio’s recreational market continues to mature.
New Buffalo Draws Buyers From Indiana And Illinois
On Michigan’s western border, New Buffalo has experienced a similar cannabis boom.
The small Berrien County community sits just minutes from Indiana and within easy driving distance of the Chicago metropolitan area. As a result, New Buffalo dispensaries attract consumers from both Indiana and Illinois seeking lower prices and greater product selection.
For Indiana residents, the attraction is obvious. Recreational marijuana remains illegal in Indiana, making Michigan the closest legal option for many consumers.
Illinois residents face a different challenge. While recreational cannabis is legal there, prices and taxes remain substantially higher than in Michigan, creating a strong incentive to shop across the border.
On busy weekends, parking lots at New Buffalo dispensaries often contain vehicles from Indiana, Illinois and Wisconsin.
The cannabis industry has become such a significant economic force that New Buffalo is now widely viewed as one of the Midwest’s premier cannabis tourism destinations.
Success Brings New Challenges
Unlike Monroe, however, New Buffalo’s cannabis growth has sparked increasing concerns among some local residents.
With fewer than 2,000 year-round residents, New Buffalo is far smaller than Monroe and traditionally has been known as a quiet resort and tourism community. The rapid expansion of cannabis retailing has brought increased traffic, congestion and concerns about how the industry is reshaping the city’s commercial districts.
Some residents and local officials have questioned whether the concentration of dispensaries has grown beyond what many originally envisioned when cannabis businesses were approved.
The debate highlights one of the unintended consequences of Michigan’s cannabis success. While communities benefit from jobs, tax revenue and increased tourism spending, they must also manage the impacts of becoming regional cannabis destinations.
Will The Price Gap Continue?
Ohio regulators continue expanding cultivation and retail capacity in an effort to improve supply and lower prices.
Industry analysts expect Ohio prices to gradually decline as additional product reaches store shelves and competition increases. However, few expect Ohio to match Michigan’s pricing anytime soon.
Michigan’s enormous cultivation capacity, hundreds of dispensaries and years of intense competition continue creating downward pressure on prices.
That reality may be difficult for cannabis businesses struggling to maintain profitability, but it remains highly attractive to consumers.
Michigan Is Winning The Midwest Cannabis Price War
For now, Michigan’s competitive advantage remains clear.
Whether they are driving north from Toledo, crossing the Indiana border into New Buffalo, or making weekend trips from the Chicago area, thousands of consumers continue voting with their wallets.
As long as Michigan cannabis remains significantly cheaper than products sold in neighboring states, Monroe and New Buffalo are likely to remain two of the busiest border cannabis markets in the Midwest.
And for an industry facing increasing financial pressure, those out-of-state customers may be more important than ever.
