How to Open a Dispensary in Michigan

Overview

Do you want to know how to open a dispensary in Michigan? This page gives you the latest news and information about starting a cannabis business in Michigan including insightful information about what is ahead for the state.

The state of Michigan was the first in the Midwest to legalize marijuana for adult use. Medical marijuana has been allowed since 2008 as well. Cannabis is still listed as a Schedule 1 substance in Michigan despite the state enacting adult-use regulations in 2018. 

Starting March 7, 2022, the Michigan Marijuana Regulatory Agency (MRA) has modified the administrative rules to continue promoting company development while ensuring safe consumer access to marijuana. The $6,000 application fee for both adult-use and medicinal marijuana has been reduced to $3,000. There are no longer renewal levels for adult-use establishments. Tiers for medical marijuana facility renewal were eliminated and this change will take effect in the 2023 fiscal year.

On October 19, 2023, Michigan Governor Gretchen Whitmer signed bipartisan bills, SB 180 and SB 179, enabling state-licensed marijuana businesses to trade with tribal cannabis entities. SB 180, sponsored by Sen. Roger Hauck, primarily encompasses policy changes, while SB 179, sponsored by Sen. Jeff Irwin, focuses on tax revenue allocation adjustments. Both bills are interdependent, requiring both to become law to take effect. These laws are now in immediate effect. 

The Opportunity Size

According to projections made in the 2021 MJBizFactbook, the adult use cannabis market in Michigan will increase to between $2 billion and $2.5 billion by 2025 in sales, up from an estimated $500 million in 2020. 

Regarding jobs supported by legal cannabis in the state, a Job Report 2022 reveals that Michigan is the state with the third-highest number of jobs associated with cannabis in the whole US. According to the research findings, as of January 2022, the cannabis industry in Michigan employed 31,152 people.

Local Cannabis Restrictions & Laws

The Cannabis Regulatory Agency’s September 2023 Monthly Report states that 172 municipalities have opted for the Medical Marihuana Facilities Licenses Act. 138 municipalities opted into the Michigan Regulation and Taxation of Marihuana Act, while 1,370 municipalities opted out.

Medical Marijuana

In November 2008, residents of Michigan participated in a vote that resulted in the passage of the Michigan Compassionate Care Initiative, often known as the Michigan Medical Marihuana Act. The bill authorized medical marijuana for ill people. It enabled qualified patients to consume marijuana with a doctor’s consent and allowed eligible patients and caregivers to cultivate medicinal marijuana.

As of September 2023, there are 129,099 qualifying patients and 11,554 caregivers in Michigan, according to the Monthly Report.

Medical Marijuana Program Opportunities

The Cannabis Regulatory Agency (CRA) is in charge of regulating the medical marijuana facilities and licensees in the state. 

A Provisioning Center license grants the retail store the authority to sell medicinal marijuana and items containing medical marijuana to patients possessing active registration cards and caregivers who have active registration cards.

There are two steps to the application process for a medical marijuana license in Michigan.

1. Prequalification. A comprehensive background check for not only the primary applicant but also any supplemental applicants.
2. State Operating License. You will need to provide information that is specific to the actual location of the applicant’s facility.

You can learn more about the application procedure by reading this page.

How much money do you need to start a medical dispensary in Michigan?

Application Fee: An application for a marijuana license must be submitted with a $3,000 nonrefundable application fee.

Initial Licensure and Renewal Fees: $2,813 for a Provisioning Center license effective October 1, 2022 – September 30, 2023.

Annual Regulatory Assessment: The regulatory assessment is necessary before each license is given and varies based on the expected number of licenses.

Additional Costs: If necessary, the applicant may have to pay extra fees.

Recreational Use Legalization

In November 2017, legalization supporters presented 365,000 signatures for the 2018 ballot. The state legislature rejected to adopt the bill in June 2018, putting it on the ballot. Michigan voters adopted Proposal 1 on November 6, 2018, making it the 10th state to legalize recreational cannabis. December 2019 marked the beginning of recreational cannabis sales, for which state licenses are required. 

As it pertains to cannabis business licensing:

Types of licenses: The law sets up six license types for cannabis businesses: retailers, cultivators, processors, microbusinesses, testing facilities, and secure transporters.

Social equity program: Regulators must develop a plan to encourage engagement in the marijuana sector by persons from disproportionately disadvantaged neighborhoods.

License renewals: All state licenses are good for one year unless the department gives you a longer-term license. A state license is renewed when a marijuana business in good standing sends the state a full renewal application and the renewal fee.

Excise tax: Each marijuana dispensary and microbusiness is subject to an additional excise tax equal to 10% of the retail price of marijuana sold or transferred to a customer who is not also a marijuana business.

Requirements To Get a Recreational Cannabis Business License In New Jersey

For a marijuana license application to be complete, it must have all the required information including:

• A description of the type of cannabis business
• A copy of the proposed plan for where to put the marijuana business
• Disclosure for persons that have a beneficial interest as required
• Confirmation of compliance by the municipality

Check out the new Marijuana Licenses Rules for information on the comprehensive application requirements, qualifications, and state license eligibility.

How do you get a recreational dispensary license in Michigan?

To obtain a recreational dispensary license in Michigan, you must go through two steps. The first is prequalification and the second is establishment licensing. 

Step 1: Prequalification

Prequalification is the initial stage of the application procedure for recreational marijuana establishments. Prequalification applications must be submitted by both the principal applicant and any additional applicant. Background checks are performed on the primary applicant and supplementary candidates during prequalification.

Step 2: Establishment Licensing

After completing step 1 prequalification, the primary applicant may submit step 2 establishment license applications for any recreational marijuana establishment state licenses it wants. In step 2, the CRA evaluates the prospective marijuana establishment.

• The CRA evaluation takes into account, among other things, business specifications, evidence of financial accountability, information about municipalities, and general employee information.
• CRA must inspect the marijuana business within 60 days of a full application.
• Marijuana establishments must pass a BFS inspection within 60 days after applying.

To see the instructions in their entirety, click here.

How much money do you need to start a recreational dispensary in Michigan?

Application Fees: For prequalification, a nonrefundable application fee of $3,000.

Initial Licensure Fees: When the license is approved, the initial license fee will be due. The initial license fee is different for each type of license: $15,000 for Marijuana Retailers, $8,300 for Marijuana Microbusinesses, and $18,600 for Class A Marijuana Microbusinesses.

Renewal Fees: $15,000 for Marijuana Retailer, $8,300 for Marijuana Microbusiness, and $18,600 for Class A Marijuana Microbusiness.

How long does it take to get a dispensary license in Michigan?

After receiving a full application and fee, the Agency must accept or refuse adult-use establishment license applications within 90 days. A full application should take no more than 90 days to process.

According to Statistical Report for the fiscal year 2021, the average time to process an initial application is:

• Retailer: 33.41 Calendar Days
• Microbusiness: 26.83 Calendar Days
• Social Equity Retailer: 26.82 Calendar Days

We will keep you updated on any changes in the legislation or news that may have an impact on your intentions to open a dispensary in Michigan as the cannabis program in the state develops further. 

The cannabis industry in Michigan will continue to grow in both medical and recreational markets. Joining our Michigan Cannabis Mailing List will allow you to get timely information on breaking news as well as informative commentary around the legalization of cannabis throughout the state of Michigan.