C3 Industries has filed a state Worker Adjustment and Retraining Notification, or WARN notice, announcing plans to close its 35,000-square-foot cannabis cultivation facility in Webberville on Feb. 14, eliminating 62 jobs as Michigan's legal marijuana industry faces mounting financial pressure.
The Ann Arbor–based company said the closure is driven by the state's new 24% wholesale cannabis tax, which takes effect Jan. 1 and applies to transactions between growers, processors and retailers. The tax is designed to fund road repairs but is hitting an industry already grappling with collapsing prices and oversupply.
"Unfortunately, we cannot operate the Michigan production facility profitably with the new wholesale tax going into effect," said Ankur Rungta, C3's co-founder and chief executive, in comments to Crain's Detroit Business. "We warned many state legislators that this would be the likely impact if they passed the wholesale tax."
MITechNews.com contacted Rungta multiple times through emails seeking verification of his remarks to Crain's, but did not receive a response. The closure comes as Michigan's cannabis industry enters what many operators describe as a breaking point.
Wholesale and retail prices have plunged to historic lows, driven by years of unrestricted licensing and record harvests. The average retail price for an ounce of adult-use marijuana fell to $59.79 in November, down nearly 17% from a year earlier, according to the Michigan Cannabis Regulatory Agency.
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