Open a Cannabis Business in Michigan
Updated: Jan 14, 2019
Medical marijuana is legal in Michigan for licensed patients with qualifying medical conditions. Initiated with Law 1 of 2008, the Michigan Medical Marihuana Act, was approved by voters in 2008 with 63% voting in support of legalizing medical marijuana. This law provides protections for qualifying patients and growers and legalizes the use of marijuana for medicinal purposes. Qualifying patients may possess up to 2.5 ounces of usable marijuana and may cultivate 12 plants kept in an enclosed, locked facility. A list of qualifying debilitating medical conditions may be found here and here.
In 2016, Michigan passed a series of bills (HB4209, HB4210, and HB4827, collectively the Medical Marihuana Facilities Licensing Act or MMFLA) implanting a medical marijuana licensing process and authorizing a commercial, regulated system. This provided additional sources of medicine for medical marijuana patients who previously had to cultivate their own, under the Michigan Medical Marihuana Act (Proposal 1) of 2008.
Under the new system, the Michigan Department of Licensing and Regulatory Affairs (LARA) Bureau of Medical Marihuana Regulation (BMMR) began accepting commercial cannabis business applications on December 15, 2017.
AVAILABLE MEDICAL MARIJUANA LICENSE TYPES IN MICHIGAN:
Grower Class A: Grower license for 500 marijuana plants.
Grower Class B: Grower license for 1,000 marijuana plants.
Grower Class C: Grower license for 1,500 marijuana plants.
Processor: License authorizes purchase of marijuana from a grower and sale of infused-products or marijuana to a provisioning center.
Secured Transporter: License authorizes storage and transportation of marijuana and associated money between facilities.
Provisioning Center*: Licensee can sell marijuana to a qualified patient or registered primary caregiver.
Safety Compliance Facility: License authorizes the facility to receive marijuana from, test marijuana for, and return marijuana to only a marijuana facility.
*Michigan has banned the use of several words commonly associated with cannabis dispensaries, one of which is the term “dispensary” itself. In addition, Michigan state law requires that Medical Marijuana facilities shall not use any of the following terms in regard to advertisement:
Doctor of pharmacy
Licenses pharmacy technician
Certified pharmacy technician
The strict regulations around language are meant to create clarity for medical marijuana patients. Government officials believe it’s critical that patients have clarity as to where they can obtain medicine and considering doctors are unable to actually write prescriptions for medical cannabis under federal law, only provide recommendations, banning words such as “prescription” is good policy.
Michigan’s Bureau of Medical Marihuana Regulation (BMMR) spells marijuana in the more antiquated style with an “h” to remain compliant with the statutory definition of marihuana adopted in the Public Health Code for the Marihuana Tax Act of 1937. An act of the Michigan Legislature would be required to change the spelling in Michigan statues, including in newer marihuana laws.
NOVEMBER 2018 BALLOT INITIATIVE:
Michigan State Proposal 18-1: a proposed initiative law to authorize and legalize possession, use and cultivation of marijuana products by individuals who are at least 21 years of age and older, and commercial sales of marijuana through state-licenses retailers.
The 2018 ballot proposal would:
Allow individuals 21 and older to purchase, possess and use marijuana and marijuana-infused edibles, and grow up to 12 marijuana plants for personal consumption.
Impose a 10-ounce limit for marijuana kept at residences and require amounts over 2.5 ounces be secured in locked containers.
Create a state licensing system for marijuana business and allow municipalities to ban or restrict them.
Permit retail sales of marijuana and edibles subject to a 10% tax, dedicated to implementation costs, clinical trials, schools, roads, and municipalities where marijuana businesses are located.
Change several current violations from crimes to civil infractions.
According to MJBizDaily, there is a strong support for recreational marijuana in Michigan, with 54% of voters support Proposal 1 and only 38% oppose. Voter registration for November general election deadline is Tuesday, October 9, 2018. Michigan’s election begins Tuesday, November 6, 2018. If you are not registered to vote, you may do so here.
HOW TO APPLY FOR A CANNABIS BUSINESS LICENSE IN MICHIGAN
Whether you want to open a provisioning center (dispensary), processing (production) or cultivation facility, securing a commercial cannabis business license in Michigan is your first hurdle. The contents of a commercial cannabis business application tend to be complex and requires a great deal of intricate data, such as financial planning, standard operating procedures, community and environmental impact planning, citation and references to state statutes; amongst other information that must be carefully crafted, presented and explained. Additionally, there are many concerns to keep in mind when drafting your cannabis business application; it is essential to proofread each and every page, part and element with sharp eyes. After all, this is your first impression and quite possibly your only chance to prove to the State of Michigan that you have the means and are willing and able to build and operate a successful and compliant medical marijuana business.
There is a two-step application process for cannabis facility licensing in Michigan, which allows applicants to begin the application process while still seeking a location for the proposed cannabis facility. Applicants with an established or identified location may also submit step one (1) and step two (2) materials at the same time.
I. PREQUALIFICATION: Prequalification will include a full background investigation of all applicants and their affiliates. The background investigation includes, but it not limited to, review of an applicant’s criminal and financial history, regulation and taxation compliance, and business litigation history. BMMR will require applicants to be fingerprinted during prequalification review.
At a minimum, the following information and documentation from applicants must be submitted:
Name and contact information for person completing the application and the individual or entity seeking licensure.
Name, contact information, and percentage of interest for persons or businesses with an interest in the applicant.
Supporting documentation demonstrating the applicant’s business status, financial position, regulatory compliance, criminal history information, and taxation history. This includes, but is not limited to: company bylaws, business registration documents, prior or existing regulatory licenses, W2s, and financial institution statements.
Signed and notarized attestation statements affirming full disclosure and consenting to the BMMR background investigation process.
Completed Entity/Individual Prequalification Packet (EIPP)
Completed Supplemental Applicant Prequalification Packet (SAPP)
II. LICENSE QUALIFICATION: For the license qualification process, the applicant will identify the specific facility for which they are applying for and provide information specific to the sought license (grower, processors, provisioning center, safety compliance facility, or secured transporter).At a minimum, the BMMR will request the following information and documentation during the second step of the application process:
Municipality approval and copy of the municipality’s authorizing ordinance.
Technology, staffing, marketing, inventory, security and recordkeeping plans.
Depictions of the marijuana facility floor plans and layout of facility premises.
Proof of insurance, bond, or securities for the facility.
To apply for a commercial cannabis business license, you may submit a completed application here or download a paper application and submit in person or by mail. Both paper and online applications require the same documentation and information. At this time, there is no deadline to submit a completed application and there is no limit to the number of licenses issued. However, the local municipality has the authorization under MMFLA to restrict the type and number of facilities licensed in their boundaries.
APPLICATION COSTS + START-UP CAPITAL
The initial cost of a cannabis business facility license in Michigan include the application fee and the regulatory assessment fee. The application fee for a cannabis facility license is $6,000 for each category and class of license. The application fee is non-refundable and must be submitted before the application can be processed. An applicant may also need to pay a fee to its municipality of up to $5,000. The regulatory assessment is due prior to the issuance of each license, is non-refundable, and may vary depending on the number of licenses anticipated to be issues. The regulatory assessment does not apply to safety compliance (testing) facilities.
REGULATORY ASSESSMENT: LARA is currently determining the annual regulatory assessment for fiscal year 2018 for each for each of the five (5) licenses types.
Grower Class A: assessments may not exceed $10,000
Grower B-C, Processor, Transporter and Provisioning Center license: assessment will be between $10,000-$57,000
The total amounts of capitalization based on the type of cannabis facility specified in the Michigan application for a state commercial cannabis business licenses are as follows:
Grower: Class A - $150,000
Grower: Class B - $300,000
Grower: Class C - $500,000
Provisioning Center* - $300,000
Secure Transporter: $200,000
Safety Compliance Facility: $200,000
Cannabis is a movement and it's time to get moving! If you are looking to break into the Michigan medical marijuana industry, The J. Whitney Group is here to help you succeed. Whether you are looking for a final proofreading with valuable feedback about improvements that could strengthen your application, or need application assistance from start to finish, we have a team of dedicated professionals to help you each step of the way. Our Application Advising + Review will give you more confidence and peace of mind knowing you submitted the best possible application. Contact us today and discover how we will help you overcome the first hurdle, and more, to create a winning application and successful cannabis business!