Recreational and medical cannabis are legal in Michigan. There are nearly a quarter-million medical marijuana patients in Michigan, making the state second only California in the number of licensed patients. Michigan was also the first state in the Midwest to pass recreational cannabis legislation.
Business licenses are now available for a range of businesses including dispensaries, cultivators, processors, testing facilities, transporters, and microbusinesses. However, like all other states with legal cannabis markets, getting a license can be a long and difficult process. The cannabis market is competitive, so it is important to have as much knowledge as possible before applying for a license.
This article is a resource for anybody interested in starting a Michigan cannabis business. It includes an overview of the license requirements, essential business software for a successful application, regulatory history, and other essential links.
Michigan Cannabis Background
The legal cannabis market in Michigan began in November, 2008 with the passage of the Michigan Compassionate Care Initiative. This proposal allowed the use of physician-approved medical marijuana for specific medical conditions. In 2016, Michigan then passed a collection of bills called the Medical Marijuana Facilities Licensing Act (MMFLA) which created the regulatory and licensing system for the production and sale of medical cannabis.
The last bill (HB 4827) established a statewide seed-to-sale monitoring system. This is why seed-to-sale software is essential for all business owners. Find out more about seed-to-sale how to choose seed-to-sale software here.
If you are interested in starting a cannabis business, the first place to start is to check out the regulations and familiarize yourself with the Department of Licensing and Regulatory Affairs (LARA), which regulates the medical and recreational programs. It is important to note that local municipalities may be able to opt-out or limit the number of cannabis businesses in their area. The Bureau of Marijuana Regulations compiled this unofficial document showing which municipalities have opted out of the program.
How to Apply for a Michigan Cannabis Business License
This section is an overview of the application process and more detail for medical vs. recreational applications can be found below. Applications for a license can be submitted online, in person, or by mail. The application process requires detailed personal information as well as business registration document such as:
- A passport quality photo and a copy of their government-issued ID
- Tax returns for the past three years
- Information on financial accounts from the last three year
- Information about real estate, debt, insolvency, and bankruptcy
- CPA attested financial statement
- Official business registration document
- Copy of bylaws and other governing documents (corporations)
- Certificate of good standing
- Approval to conduct business transactions in Michigan
- Trademark, service mark or insignia registration documents
- Copy of organizational structure
Software and Service resources for application requirements
Every business needs software to operate effectively. This is why choosing the right software is an essential part of the application process. Examples of essential software for all business types include:
- Accounting & Bookkeeping
- Michigan-based Business Consulting Services
- HR & Payroll
- Business Insurance
- Legal Services
Seed-to-sale and point of sale are essential for a functioning business but also required by the state. Michigan’s chosen regulator system is Metrc.
How to get a Medical or Recreational Cannabis License in Michigan
Growers, processors, and dispensaries are required to have both city and state licenses in order to legally cultivate and process. City licensing and growing requirements can vary, so be sure to check the regulations in the city where you intend to operate. License applications can require an upfront financial commitment, be sure to set aside $6,000 for the nonrefundable state application fee and another $5,000 for city or municipality fees. There are three licensing levels for medical growers Class A (500 plants), Class B (1000 plants), Class C (1500+ plants). For recreational cultivation the classes are slightly different: Class A (under 100 plants), Class B (under 500 plants), Class C (under 2,000 plants).
Applying for a cannabis license in Michigan is a two-step process. The first step is that applicants must secure a business location and have a pre-qualification check that includes a full background check with all the information listed in the previous section (e.g. financial information, ownership interests, etc). The next step is the license qualification, which is information about the type of facility license and the physical location of the business. Then, a representative from the state will be assigned to the application and will manage the entire process through the Medical Marijuana Licensing Board. It is only after the MMLB has approved the possibility of a license, that the business owner must pay the licensing fees. Then the license can be issued.
Before going through this lengthy application process, business owners must also demonstrate eligibility based on the following points:
- Never convicted of a felony in any state or a misdemeanor within the past five years that are related to controlled substances, theft, or fraud.
- Demonstrate the ability to maintain liability and casualty insurance in compliance with their Class of license
- Submit a business plan that demonstrates the ability to operate a cannabis business including a security plan, marketing plan, facility plan, technology plan, record-keeping plan, waste disposal, and community plan. CUE Cannabis is a resource for all business owners and can answer any questions you might have–especially relating to the security, technology, facility or record keeping plan.
We have compiled a list of Michigan resources that can answer numerous common questions
- How to get a cannabis license in Illinois
- Essential business software checklist Michigan
- Cannabis Cultivation Software
- Five things to look for in a Cannabis POS
- API Agreement for METRC Integrators
- Accela Application Demo
- MMFL Application Document Checklist
- Statement of Money Lender Form