Michigan Cannabis Business Licenses
WHAT IS MICHIGAN'S CURRENT CANNABIS MARKET STATUS?
Content Below Last Updated by Point7 4/8/2022
Michigan became the first Midwest state to legalize the possession and use of recreational cannabis for adults age 21 years or older through the Michigan Regulation and Taxation of Marijuana Act, also known as Proposal 1, in 2018. Within one year of legalization, Michigan sold more than $1.6 million worth of cannabis products. Michigan legislators and regulators have received some criticism surrounding supply chain issues in the state, which is still an issue in 2022. In 2019, legislators began the process of expanding their processes for expungement of cannabis charges, including an estimated 235,000 residents with low-level cannabis convictions on their records.
WHAT ARE MICHIGAN'S CANNABIS LAWS?
Michigan voters approved Proposal 1 in 2018 to end cannabis prohibition and effectively legalize adult-use cannabis. Governor Whitmer established the Marijuana Regulatory Agency within the Michigan Department of Licensing and Regulatory Affairs to oversee and implement the Michigan cannabis license process, and regulation of cannabis businesses. The Marijuana Regulatory Agency released adult-use regulations for grower, processor, and retailer licenses.
Michigan’s House of Representatives passed a series of bills in November 2019 that allowed for increased cannabis criminal history expungement, including over 200,000 cases of misdemeanor cannabis convictions. Michigan’s Senate has yet to approve the legislation; however, based on prior support of Michigan cannabis legislation, it is expected Governor Gretchen Whitmer will sign the bills into law.
The legislation would allow for more progressive provisions, including on-site cannabis consumption licenses and temporary events. In addition to these unique provisions, Michigan continues to support communities that have been disproportionately harmed by cannabis prohibition through business education and licensing support. The Michigan Marijuana Regulatory Agency implemented a Social Equity Program offering qualifying individuals and businesses with fee reductions, outreach, and education sessions, and a business resource directory to support potential business owners in the Program.
WHAT IS MICHIGAN'S CANNABIS LICENSING TIMELINE & CANNABIS APPLICATION PROCESS?
There are currently no licensing caps on the state level, and applications are on an open enrollment basis. Caps are placed on each municipality and a municipality can opt-out of the cannabis program (both medical and adult-use) if they choose to. Contact the local municipality you are interested in to ensure there are no license caps placed on the facility type you would like to apply for.
WHAT IS THE HISTORY OF CANNABIS IN MICHIGAN?
In November 2008 Michigan voters approved the Michigan Medical Marijuana Initiative, also known as Proposal 1. This groundbreaking measure allows for qualifying medical cannabis patients with a physician's recommendation to possess up to two and one-half ounces of cannabis. Patients can receive a physician’s recommendation for treatment of a limited list of qualifying medical conditions. The measure also allows patients/caregivers to grow up to 12 cannabis plants at home, but does not explicitly allow for dispensaries to operate. The passage of Proposal 1 made Michigan the 13th state to legalize the use of medical cannabis, and was the first Midwestern state to do so.
In September 2016 Governor Rick Snyder signed a package of bills, which among other reforms, allowed the operation and regulation of medical cannabis dispensaries, and set a taxation rate of 3% on medical cannabis sales. This package of bills also explicitly approved the use of non-smokable forms of cannabis, such as topicals and edibles.
In November 2017, activists pushing for adult-use cannabis legalization submitted 365,000 signatures to put a measure on the 2018 ballot. In June 2018 state lawmakers declined the option to pass the measure, and instead placed it on the November 2018 ballot. In November 2018 Michigan voters approved Michigan Regulation and Taxation of Marijuana Act making Michigan the tenth state and the first in the Midwest to legalize cannabis for recreational use.
In December 2019 Michigan cannabis businesses launched operations with sales of nearly $1.6 million in the first week, in spite of dispensary reports of low inventories. On March 1, 2021 the Michigan Marijuana Regulatory Agency lifted the eligibility restriction, which required an applicant to hold an active medical marijuana license to be eligible for an adult-use license.
On October 12, 2020, Governor Gretchen Whitmer signed a bill into law aiming to expunge past low-level cannabis convictions.
DOES MICHIGAN HAVE A HEMP PROGRAM?
In January 2019 the Michigan Industrial Hemp Research and Development Act, also known as Public Act 641, established a licensing program for persons engaged in the growing, processing, and handling of industrial hemp. Under this Act anyone who grows industrial hemp or processes, handles, brokers, or markets industrial hemp in Michigan, must obtain a registration or license from the Michigan Department of Agriculture and Rural Development (MDARD). Persons who obtain the appropriate registration, or license will be permitted to grow, process, handle, broker, or market industrial hemp in conformance with Michigan law. In order to be in conformance with both state and federal law, participation in an Ag Pilot Program is required.
In October, 2020 MDARD received federal approval of the state’s Industrial Hemp Plan. This plan establishes regulatory requirements for cultivating industrial hemp and gives MDARD primary oversight of industrial hemp production in Michigan. USDA approval signifies the Industrial Hemp Plan complies with the 2018 Farm Bill requirements and the USDA’s Interim Final Rule. The pertinent forms for the Industrial Hemp Program, including the Hemp Grower Registration Application and the Hemp Processor-Handler Application can be found here.
PREPARING FOR THE MICHIGAN CANNABIS MARKET
We are ready to support your team as you prepare for cannabis licensure in Michigan. Contact Point7 to discuss the fully customizable products and service packages available that have proved successful for operators around the country.