Cannabis in Michigan is legal for both medical and recreational use. There are currently nearly a quarter million medical marijuana patients in Michigan making the state second only to California in the number of licensed patients. In 2018, Michigan became the 10th state to legalize recreational marijuana.
Industry analysts ArcView Group projects that Michigan will have $556 million in sales by 2020 when the first recreational cannabis dispensaries are expected to open making Michigan the third-largest grossing cannabis industry in the nation behind California and Colorado. Moreover, these values are expected to increase as recreational use ramps up.
Michigan's new marijuana agency will regulate a market in turmoil
Recently, by executive order of Gov. Gretchen Whitmer, Michigan consolidated regulatory oversight into the Michigan Marijuana Regulatory Agency which will take over the duties from the Bureau of Marijuana Regulation. In addition to regulating the marijuana industry, the MMRA is also responsible for approving medical marijuana license applications as well as creating rules for Michigan's recreational adult use market. The agency is expected to issue emergency rules for recreational licenses and begin accepting license applications by the fall of 2018.
The MMRA has a 2019 budget of roughly $19.7 million. Recommendations for the 2020 fiscal year would increase the agency's funding to $22 million to account for the additional regulatory requirements of Michigan’s recreational use market.
The agency has said that it anticipates issuing emergency rules for recreational marijuana by June or July of 2019 and licensing is expected to begin later in the year.
Since a new “rolling application process” was implemented, a large backlog of medical marijuana license applications are now being processed in a timely manner. Although application reviews are no longer public, the agency expects to hold quarterly public hearings to solicit public comments.
With the passing of Proposal 1 in 2018, Michigan became the first Midwest state to legalize adult recreational use of marijuana and is now the second-most populous state in the country to do so. The personal possession and home cultivation of marijuana became legal for Michigan adults 21 and older 10 days after the election results were certified by the Secretary of State. Adult-use marijuana sales are not expected to begin in Michigan until 2020.
Marijuana Business Daily projects Michigan’s recreational cannabis market will generate $1.4 billion-$1.7 billion in annual sales within several years of launching, making it one of the largest in the nation.
Michigan’s foray into legal marijuana market began in November 2008, when the Michigan Compassionate Care Initiative (Proposal 1) was approved by Michigan voters allowing patients with a physician's recommendation to possess up to 2.5 ounces of marijuana for treatment of a list of qualifying medical conditions. This first step did not facilitate the development of a regulated market and made no provisions for operational dispensaries.
In 2016, Michigan passed a series of bills collectively referred to as the Medical Marihuana Facilities Licensing Act, or MMFLA. The act created a medical marijuana licensing process and a regulatory system for the production and sale of medical marijuana.
The Bureau of Medical Marihuana Regulation (BMMR) began accepting medical marijuana license applications on December 15, 2017.
On October 1, 2018, the Department of Licensing and Regulatory Affairs announced that all existing medical marijuana operations must be licensed by October 31, 2018 and state submitted Emergency Rules governing the process.
Ten years after Prop 1 passed, On November 6, 2018, Michigan voters approved The Michigan Regulation and Taxation of Marihuana Act, making Michigan the first state in the Midwest to create a recreational marijuana market.
Under the act, responsibility for marijuana licensing, regulation, and enforcement falls under the Michigan Department of Regulatory Affairs (LARA). LARA’s Bureau of Marijuana Regulation (BMR) is responsible for the oversight of medical and adult-use (recreational) marijuana in Michigan.
It’s important to note that local municipalities will be able to opt out or limit the number of marijuana businesses within their borders. This unofficial document compiled by Bureau of Marijuana Regulation staff shows municipalities which have opted out of the program.
Learn how Viridian Sciences ERP/Seed-to-sale system keeps you compliant.
Michigan growers, processors, and dispensaries are required to be licensed by both the city and state in order to legally cultivate and process marijuana. Licensing and business requirements for growers vary from city to city.
As of June 13, 2018, Michigan had processed 546 pre-qualification applications and over 150 facility license applications.
Fees for a city/municipality license can run up to $5000, and there’s a nonrefundable state application fee of $6000.
There are three licensing levels for growers:
There is a two-step process for applications. Applicants who have secured a location prior to applying will have the option of submitting both sets of materials at the same time.
Pre-Qualification includes a full background check of the applicant and all supplemental applicants. Applicants must disclose all individuals and businesses with an indirect or direct ownership interest. This step can be implemented before a location has been secured.
The second step, License Qualification, requires information specific to the physical location of the applicant’s business as well as to which type of facility license the potential licensee is applying.
A BMMR representative is assigned to each applicant and should be in communication with the applicant throughout the process.
After License Qualification (step two) is completed, BMMR will present the completed application to the Medical Marihuana Licensing Board (MMLB).
Upon approval from the MMLB, an applicant will be required to pay a regulatory assessment for each license. Once the regulatory assessment is received, the license(s) will be issued.
Applicants are ineligible if they have been convicted of or released from incarceration for a felony under the laws of this state, any other state, or the United States (federal law) or has been convicted of a controlled substance-related felony within the past 10 years. Furthermore, applicants are ineligible if they have been convicted of a misdemeanor involving a controlled substance, theft, dishonesty, or fraud in any state within the past 5 years.
Applicants must also demonstrate their ability to maintain adequate premises liability and casualty insurance for its proposed marihuana facility. For a Class A license, the applicants must show $150,000.00 in attested assets, with $37,500 of that being liquid. For a Class B license, the applicants must show $300,000.00 in attested assets, with $75,000.00 of that being liquid. For a Class C license, the applicants must show $500,000.00, with $125,000.00 of that being liquid.
Applicants are also required to submit a business plan which demonstrates a strong understanding of the operation of a cannabis business. The business plan must include a security plan, marketing plan, facility plan, staffing plan, technology plan, record-keeping plan, waste disposal plan, community plan.
In order for a location to be approved, it must not be in a city that has opted out of the program, and it must comply with the municipality’s ordinances and zoning regulations.
Upon approval, applicants must pay a regulatory assessment for each license.
These fees are subject to change.
Michigan recreational marijuana regulations mandates that LARA establishes, awards, and regulates the following recreational marijuana license types:
As of mid-April 2019, Michigan Department of Agriculture and Rural Development (MDARD) was beginning work on comprehensive hemp cultivation and processing regulations as required by the 2018 federal farm appropriations bill which legalized the cultivation and processing of hemp and CBD oil nationwide.
The State is prohibited by federal law from issuing registrations or licenses created by the Act until the state plan is submitted and approved by USDA. USDA has 60 days after submittal for review and approval.
In 2015, after the signing of the 2014 federal farm appropriations bill which created a hemp pilot program, Michigan passed a number of bills which collectively created comprehensive hemp regulations. Another set of bills was passed in 2010 to after medical marijuana was legalized in the state delineate hemp and marijuana regulations.
Applications can be submitted via an online process or in person or by mail using a paper application.
An online account can be created at https://aca3.accela.com/MIMM/Default.aspx.
A number of documents are required to be submitted with each application.
One of the most valuable resources for information on Michigan marijuana regulations is the state’s FAQ which answers numerous common questions.
Lara Contacts
Featured Services
Performance
Medical Marijuana Facility Licensing Application Section Mailing Address:
Michigan Medical Marijuana Program Mailing Address:
Medical Marijuana Facility Licensing Enforcement Section Mailing Address: