CRF operates under two AU Class C licenses (4,000 plants total). There are 819 active AU Class C licenses in Michigan as of Jan 2026 — but that's licenses, not growers. A single entity can hold multiple Class C licenses, so the actual number of distinct grower operations is lower than 819. The distribution of licenses per entity is not in the CRA data. Over the past three years, CRF has cut produce cost by $1,333/lb (-60%) while more than doubling output.
| 2022 | 2023 | 2024 | 2025 | 3-Yr Change | |
|---|---|---|---|---|---|
| Lbs Sold (wholesale) | 1,622 | 3,223 | 2,967 | 3,415 | +1,794 |
| Produce Cost/lb (wholesale) | $2,223 | $1,123 | $989 | $890 | -$1,333 |
| Sale Price/lb (wholesale) | $1,098 | $996 | $1,008 | $762 | -$336 |
| Margin/lb (wholesale, all-in) | -$1,125 | -$127 | +$19 | -$128 | +$997 |
The wholesale sale price fell $336/lb over the period ($1,098 → $762). The price dropped $246/lb in 2025 alone ($1,008 → $762) — but the cultivation cost also fell from $775 to $747, and the cultivation margin held positive at +$14/lb. The all-in produce cost ($890) makes CRF look underwater; the cultivation-only cost ($747) shows a breakeven grow carrying a money-losing business.
819 AU Class C and 1,606 Med Class C licenses were active in Jan 2026 — 2,425 combined. Medical growers can move product into the adult-use market, so the competitive field is the combined count, not AU alone. CRF holds 2 AU Class C. The number of distinct entities holding those 2,425 licenses is unknown — CRA reports license counts, not entity counts.
| $/lb | Basis | |
|---|---|---|
| CRF wholesale (2025 actual) | $762 | QBO Garden revenue / lbs sold |
| MI Treasury implied wholesale | ~$628 | 50% markup assumption on $59/oz retail (tax proxy) |
| CO wholesale AMR (Dec 2025) | $648 | CO Dept of Revenue Average Market Rate |
| MI retail flower (Jan 2026) | $945 | $59.07/oz × 16 |
CRF sold at $762/lb wholesale in 2025 (QBO Garden revenue / lbs sold) — $134/lb above the Treasury implied wholesale and $114/lb above Colorado's wholesale benchmark. Note: the $628 Treasury figure is a tax proxy derived from Jan 2026 retail, not a verified wholesale transaction price. CRF's $762 is a 2025 annual average. These are different time periods and different measurement types, so the $134 gap should not be over-interpreted. What the data does show: CRF is transacting above what Treasury assumes for tax purposes. Why — whether quality, buyer relationships, product mix, or timing — is not in the numbers.
CRF sold 3,415 lbs in 2025 from two Class C licenses (1,708 lbs per license). For context on the AU Class C population:
| Value | |
|---|---|
| Combined Class C licenses (AU + Med, Jan 2026) | 2,425 |
| AU total retail lbs sold (2025) | 7,382K |
| Retail lbs per combined Class C license (avg) | ~3,044 |
| CRF wholesale lbs sold (2025) | 3,415 (1,708/license) |
The output trajectory (397 → 776 → 1,622 → 3,223 → 2,967 → 3,415 lbs) shows the operation is still scaling year over year. Whether there's meaningful headroom within the existing 4,000-plant license capacity depends on room utilization, cycle frequency, and plant counts per room — data not included here.
CRF's $890/lb produce cost is the all-in number — every department's COGS and OpEx divided by lbs sold. The cultivation-only cost strips out departments that aren't required to grow and sell flower wholesale.
Garden is the grow. Post-Harvest is trimming, packaging, and everything between harvest and shipment. Office is almost entirely METRC compliance staff ($113K wages, $9K payroll taxes, $6K healthcare) plus software and bank fees. All three are required for any version of the business.
| 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|
| Garden COGS + OpEx | $1,404K | $1,785K | $1,670K | $1,897K |
| Post-Harvest COGS + OpEx | $536K | $517K | $467K | $496K |
| Office/METRC COGS + OpEx | $146K | $151K | $165K | $159K |
| Cultivation Total Cost | $2,087K | $2,454K | $2,301K | $2,553K |
| Lbs Sold | 1,622 | 3,223 | 2,967 | 3,415 |
| Cultivation Cost/lb (wholesale) | $1,286 | $761 | $775 | $747 |
| Sale Price/lb (wholesale) | $1,098 | $996 | $1,008 | $762 |
| Cultivation Margin/lb | -$188 | +$235 | +$233 | +$14 |
| 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|
| Cuttable Dept Revenue | $407K | $558K | $332K | $88K |
| Cuttable Dept Cost (COGS + OpEx) | $1,451K | $1,174K | $630K | $491K |
| Net Drag | -$1,044K | -$616K | -$298K | -$403K |
| Drag per lb | -$644 | -$191 | -$100 | -$118 |
| 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|
| All-In Produce Cost/lb | $2,223 | $1,123 | $989 | $890 |
| Cultivation-Only Cost/lb | $1,286 | $761 | $775 | $747 |
| Overhead from Cuttable Depts/lb | $937 | $362 | $214 | $143 |
The $567K/year interest on the P&L ($166/lb in 2025) is owed to the owners — not banks, not outside lenders. The owners hold all the paper. They are not putting in cash to pay themselves. This means: (1) the interest accrues but isn't consuming operating cash, (2) an acquirer doesn't assume it, and (3) in a restructure the owners can write it off, defer it, or convert it. For purposes of evaluating the cultivation's operating economics, interest is not a cash cost that needs to be covered by flower sales.
The AU Class C population went from 13 licenses (Dec 2019) to a peak of 850 (Jan 2024), and has since declined to 819 (Jan 2026). Net exits are running -14/month. On the medical side, Class C licenses went from ~600 (2022) to 1,606 (Jan 2026) — those licenses are overwhelmingly used for seasonal outdoor capacity, not medical retail.
| AU Class C | Med Class C | Combined | |
|---|---|---|---|
| Dec 2022 | 725 | 601 | 1,326 |
| Dec 2023 | 845 | 992 | 1,837 |
| Dec 2024 | 833 | 1,775 | 2,608 |
| Jan 2026 | 819 | 1,606 | 2,425 |
The market carries roughly 2x the production capacity it needs. Combined inventory (AU + Med) was 4.8M lbs in Jan 2026 against 518K lbs/month retail demand — 9.2 months of supply. Nearly half the inventory (49%) is categorized as fresh frozen — raw outdoor harvest that has not been processed.
| January | Retail $/oz | Retail $/lb | Change |
|---|---|---|---|
| 2020 | $512 | $8,192 | — |
| 2021 | $324 | $5,184 | -$188/oz |
| 2022 | $153 | $2,448 | -$171/oz |
| 2023 | $80 | $1,280 | -$73/oz |
| 2024 | $93 | $1,488 | +$13/oz |
| 2025 | $67 | $1,072 | -$27/oz |
| 2026 | $59 | $944 | -$7/oz |
The rate of decline is slowing ($7/oz in the last year vs $171/oz in 2021). But the absolute level is now at $59/oz — for reference, Colorado's wholesale settled at $648/lb (record low, CO Dept of Revenue AMR). Oregon outdoor wholesale is reportedly sub-$300/lb. Michigan outdoor production costs are not in this dataset.
Cultivation cost: $1,286 → $747/lb in three years. The grow was positive in 2023 (+$235/lb), 2024 (+$233/lb), and is at breakeven in 2025 (+$14/lb) despite a $246/lb wholesale price drop. Production scaling: 1,622 → 3,415 lbs. Wholesale price: $762/lb in 2025, above Treasury's $628/lb tax proxy — though as noted, these aren't directly comparable figures.
Sale price fell $246/lb in one year ($1,008 → $762). CRF's cultivation margin was +$233/lb in 2024 and +$14/lb in 2025 — the price drop ate almost all the margin but didn't kill it. How much of the $246 decline is market compression vs CRF-specific sales execution is not separable from this data.
The cuttable line items (kitchen, retail lease, sales & marketing) added $403K of net drag in 2025 ($118/lb). Retail is not operating — CRF is paying $184K/year rent on an empty building at 1115 Corunna. Without the cuttable costs, CRF's cultivation is positive at +$14/lb ($48K annually). With them, the entity loses $358K. The $567K/year interest is owner paper — the owners hold all the debt and are not putting in cash to pay themselves. It inflates the P&L loss but is not a cash operating cost.
CRF in its current form — vertically integrated with money-losing departments — is not long for this world. The entity lost $358K in 2025 (including $567K of interest to the owners). But the cultivation operation inside it earned $14/lb on 3,415 lbs — $48K of operating surplus. The interest is owner paper and doesn't consume operating cash.
What has value is the cultivation: $747/lb cost, $762/lb wholesale, two Class C licenses (4,000 plants), and a cost trajectory that went from $1,286 to $747 in three years. An acquirer sees a grow that's already cash-positive and getting more efficient every year.
What an acquirer does not want to pay for: the $403K of net drag from kitchen, an empty retail lease ($184K/year), and sales & marketing. The accumulated losses from non-cultivation operations since 2022. The gap between what the owners invested and what the cultivation alone is worth — that gap is where the pennies-on-the-dollar acquisition happens. The owner-held debt stays with the owners; the acquirer buys the cultivation asset clean.
| $/lb | |
|---|---|
| Cultivation cost (Garden + Post-Harvest + Office) | $747 |
| Sale price (wholesale) | $762 |
| Cultivation margin | +$14 |
| Annual surplus (3,415 lbs) | +$48K |
| License capacity (4,000 plants) | 3,415 lbs produced in 2025 |
An acquirer strips the losing departments and values the cultivation on $747/lb cost against whatever wholesale price they can get. The owner-held debt doesn't transfer. They discount the purchase price for the market environment: $59/oz retail and falling, 2:1 oversupplied, equilibrium years out. The owners' investment gets written down to whatever the cultivation can earn as a standalone operation.
If CRF cuts the losing departments and refocuses on cultivation + wholesale:
| Current (2025) | Post-Restructure | |
|---|---|---|
| Cost/lb | $890 (all-in) | $747 (cultivation-only) |
| Sale Price/lb (wholesale) | $762 | $762 |
| Operating Margin/lb | -$128 | +$14 |
| Annual Operating P&L (3,415 lbs) | -$358K* | +$48K |
Combined Class C licenses (AU + Med) have declined from ~2,698 (Sep 2024 peak) to 2,425 (Jan 2026), a net rate of about 14 licenses/month. If that rate holds and approximately half the current licenses need to exit for supply to approach demand (based on the 2:1 working ratio), that's roughly 5–6 years. But this is arithmetic on assumptions — the exit rate could accelerate or stall, "half" is an approximation, and license exits don't map 1:1 to capacity reduction (a multi-license entity shutting down removes several at once). Demand is still growing in lbs (7,382K in 2025 vs 6,481K in 2024) even as revenue declined for the first time ($3.18B vs $3.29B). The rate of retail price decline has slowed: $7/oz in the last year vs $171/oz in 2021.
Colorado is the closest analog: revenue peaked 2021, wholesale settled at $648/lb after a 48% reduction in cultivation licenses over 4 years. Michigan is earlier in the consolidation curve but further into price compression.
For CRF, the cultivation is already cash-positive ($747/lb cost, $762/lb sale, $48K annual surplus). An acquirer buys the grow, the licenses, and the rooms — clean, no losing departments, no owner debt. The owners write off the rest. The cultivation is the asset worth preserving. Everything around it needs to be evaluated on whether it helps or hurts the cost per lb of flower out the door.