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What Are the Cannabis Licensing Requirements in Michigan? (February 2024)

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On November 6, 2018, Michigan voters made a historic move by legalizing adult-use cannabis through the passage of Proposal 18-1, officially known as the Michigan Regulation and Taxation of Marijuana Act (MRTMA). Michigan became not only the 10th state to legalize recreational cannabis but also the first in the Midwest to do so.

MRTMA ushered in a new era, permitting individuals aged 21 and older to possess up to 2.5 ounces of cannabis and cultivate up to 12 marijuana plants within their residences. To oversee cannabis licensing in the state, the Department of Licensing and Regulatory Affairs was tasked with establishing rules and procedures. It's important to note that the state does not impose a cap on the number of licenses at the state level; however, municipalities have the authority to set their own limits. Moreover, non-Michigan residents are welcome to invest in cannabis businesses within the state.

A notable development in March 2021 was the removal of the requirement for adult-use license applicants to hold an active medical marijuana facility license to be eligible for various MRTMA state licenses, including marijuana retail, marijuana processing, Class B marijuana growing, Class C marijuana growing, and marijuana secure transportation. Additionally, as of December 6, 2021, non-residents gained the ability to apply for Class A marijuana grower licenses and marijuana microbusiness licenses.

Prior to the MRTMA, in 2008, Michigan enacted the Michigan Medical Marihuana Act (MMMA), which legalized the use and possession of cannabis by Michigan residents diagnosed with debilitating medical conditions. This law has evolved to encompass twenty-two specified conditions along with a catch-all provision that allows patients to qualify for medical-use cannabis prescriptions.

Michigan's regulatory framework for cannabis is particularly business-friendly, featuring lower tax rates (a six percent sales tax and a ten percent excise tax) than most states permitting for-profit licensees in the adult-use sector. The state issues various licenses depending on the activities of medical-use cannabis-related businesses, each with distinct statutory qualifications. These licenses can be transferred after state approval.

Marijuana Licence Types in Michigan

Under the Medical Marijuana Facilities Licensing Act (MMFLA), Michigan offers three classes of medical marijuana grower licenses:

  • Class A: Allows cultivation of up to 500 marijuana plants.
  • Class B: Permits cultivation of up t o 1,000 marijuana plants.
  • Class C: Authorizes cultivation of a maximum of 1,500 marijuana plants.

These licenses operate within specific regulatory zones, primarily agricultural or industrial areas, or unzoned locations, as specified in Section 205(1) of the MMFLA.

Recreational Marijuana Grower Licenses

Michigan's recreational marijuana grower licenses, governed by the Michigan Regulation and Taxation of Marijuana Act (MRTMA), are classified as follows:

  • Class A: Enables cultivation of up to 100 marijuana plants. MMFLA licensing is not required, but stacking licenses is prohibited.
  • Class B: Allows cultivation of up to 500 marijuana plants. Applicants must hold an MMFLA license but cannot stack licenses.
  • Class C: Permits cultivation of up to 2,000 marijuana plants. MMFLA licensing is required, and stacking up to five Class C licenses is allowed.

Moreover, an “excess marijuana grower license” enables cultivation of up to 10,000 marijuana plants for the recreational market, provided specific conditions are met. Licensees can allocate medical plants to the recreational market if they hold five MRTMA Class C grower licenses and at least two MMFLA Class C grower licenses.

Transfer of Marijuana

Typically, marijuana transfer must involve a marijuana secure transporter. However, transfers to a marijuana retailer or marijuana processor without a secure transporter are permitted under specific conditions:

  • The transfer must be recorded in the Marijuana Enforcement Tracking Reporting & Compliance (METRC) system.
  • The recipient and transferor must be located in the same area, with transfers conducted on private properties without public highway access.

Eligibility Requirements

To qualify for a medical or recreational marijuana grower license in Michigan:

  • Applicants and investors must not have interests in safety compliance or secure transporter facilities.
  • Licensees must maintain current inventory and transaction records in the statewide monitoring system, as required by the MRTMA and MMFLA.

Who Can Grow Marijuana in Michigan?

For MMFLA compliance, a marijuana grower licensee must have a minimum of two years' experience as a caregiver or employ an active caregiver for at least two years. Holding a medical marijuana card or hiring registered medical patients is not prohibited.

Michigan law allows convicted felons to apply for marijuana grower licenses, except those with convictions related to distributing controlled substances to minors or patterns of theft, dishonesty, or fraud indicating a lack of integrity.

Employee Licensing

Generally, employees of licensed marijuana-growing facilities do not require licensing in Michigan. However, the law encourages background checks on potential employees to ensure they meet the necessary criteria. Employees with pending convictions for controlled substance-related felonies within the past ten years are typically not eligible for employment.

How to Obtain a Marijuana Cultivation License in Michigan

The application process for a Michigan marijuana grower license involves two primary stages: pre-qualification and license qualification.

  • Pre-Qualification Stage: This stage involves completing prequalification forms, conducting background checks, and demonstrating financial responsibility. The fees for prequalification vary by applicant type.
  • License Qualification Stage: Applicants must identify a location, submit the required documentation, pass inspections, and pay licensing assessment fees. The application process can be complex, and experienced attorneys can assist applicants in navigating it effectively.

Cost of Marijuana Cultivation Licenses

For MRTMA licenses, the initial application fee is $3,000, with varying initial licensure fees based on the license class. Renewal fees are the same as the initial licensure fees.

For MMFLA licenses in the Fiscal Year 2024, the initial licensure fees are as follows:

  • Class A: $1,500
  • Class B: $3,000
  • Class C: $4,500

Licensing assessment fees vary based on the CRA's determination of the licensee's tier.

Multiple License Types

Michigan permits individuals and entities to apply for and hold multiple license types, allowing for integrated operations combining various license classes, such as cultivation and processing licenses.

Navigating Michigan's marijuana cultivation licensing system requires a deep understanding of the distinctions between medical and recreational licenses, eligibility criteria, and the complex application process. With this knowledge, aspiring cultivators can take their first steps toward becoming part of Michigan's thriving cannabis industry.

Conclusion

Michigan has seen significant growth in its cannabis industry, with marijuana sales surpassing $500 million in the first full year of the adult-use program and reaching $1 billion in 2020. In 2021, combined sales of adult-use and medical cannabis soared to $1.8 billion. The numbers continue to climb, with May 2022 witnessing medical cannabis sales exceeding $23 million and recreational cannabis sales topping $163 million. As of April 2022, Michigan boasts 478 recreational cannabis stores and 540 medical marijuana dispensaries, with ample room for further expansion and development in this flourishing market.

 

Lydia K. (Bsc. RN) is a cannabis writer, which, considering where you’re reading this, makes perfect sense. Currently, she is a regular writer for Mace Media. In the past, she has written for MyBud, RX Leaf & Dine Magazine (Canada), CBDShopy (UK) and Cannavalate & Pharmadiol (Australia). She is best known for writing epic news articles and medical pieces. Occasionally, she deviates from news and science and creates humorous articles. And boy doesn't she love that! She equally enjoys ice cream, as should all right-thinking people.


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