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This story was republished with permission from Crain’s Detroit.

Michigan marijuana prices dropped another 6% in October, setting yet another record low and putting more pressure in the already strained cannabis operators in the state. But has the state industry seen bottom?

The average price for an ounce of cannabis flower in Michigan’s adult-use market has fallen nearly 21% year-to-date to $73.99 in October, cutting into margins for the industry.

Despite those low prices, operators sold nearly 35,000 more pounds in marijuana flower and 103,000 ounces more infused liquid in October than in September.

The price compression is largely attributed to product oversupply.

There were 3.56 million active plants being grown in Michigan, down from 3.77 million in September, but still up 73% year-over-year. The decline in active plants last month is likely due to the influx of product from “Croptober,” where operators harvest their seasonal outdoor grows for the market.

Illicit market marijuana infiltrating the regulated market also plays a roll in decreasing prices.

Several legally licensed growers have been caught with suspected illicit market marijuana in recent months.

For instance, owner Endrit Cali of marijuana grower and processor HiCloud LLC in Hesperia, roughly 60 miles northwest of Grand Rapids, was pulled over by Michigan State Police in November last year with 43.5 pounds of marijuana flower. Law enforcement suspected HiCloud was storing and selling illegal market product. Several others have been investigated by the CRA for having product of unknown origin.

But the low, low prices have created a buyers’ market in the state that recorded a total of $268.6 million in sales last month – or $38.84 in per capita spending for adults 21 years and older in the state.

October’s sales also marked a return to growth after sales in September plummeted nearly 10% from the all-time sales record in August.

Mike DiLaura, chief corporate operations officer and general counsel for Troy-based retailer House of Dank Cannabis Co., believes pricing is set to rebound in 2025.

“Despite heavy downward pressure on pricing … the market is still on pace to grow 10% this year,” DiLaura wrote in a text to Crain’s. “The Michigan cannabis marketplace remains one of the strongest in the world. We believe the worst is likely behind us as it relates to downward price pressure and that 2025 should bring some pricing stability to a fast-consolidating market.”

Consolidation is key to stabilizing prices across the sector. Right now, cannabis is a volume game in the state with operators racing to sell as much product as fast as possible to keep bills paid. But it’s not always sustainable; and that leads to deals.

Some operators are being peeled apart – the equipment from Skymint’s largescale grow operation was auctioned off last week – and others are seeking refuge through acquisition: Troy-based Cloud Cannabis Co. was acquired by Mount Pleasant-based Stash Ventures in February.

Myles Baker, cannabis attorney for Dickinson Wright PLLC, said the market strength is buoyed by operators shirking the volume game and maintaining prices and their margins.

“I do not think a race to the bottom is good for most operators,” Baker said in a statement to Crain’s. “Some feel that it is the best way to unload excess product. Some are steadfast in prices and are working hard to effectively market and educate consumers.”