MacBook Air M1 won't go to sleep/wake up issue

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I have an issue with MBA M1 where it does not instantly wake up anymore. I have to press esc key to get to login screen. I also noticed that if I close the lid while playing the video, the computer does not go to sleep and the audio keeps playing. I did not change any setting, running latest update. Anyone else experiencing the same issue or know how to fix it? Thanks a lot!
 

chscag

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Your Mac's Specs
2017 27" iMac, 10.5" iPad Pro, iPhone 8, iPhone 11, iPhone 12 Mini, Numerous iPods, Monterey
Welcome to our forums.

Try resetting the SMC on your M1 MBA. The reset is different from Intel machines. Here it is:

To reset the SMC on M1 macs. Click on the apple logo to shutdown the Mac. Close the lid for 30 seconds. Power on the Mac.

Sounds simple, but if that doesn't help it may be time to contact Apple.
 

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