The Medical Marihuana Facilities Licensing Act, Public Act 281 of 2016 is an entirely new law that creates five types of licenses relating to medical cannabis, designed to regulate and control a commercial medical cannabis industry. These regulations are created to ensure both safety and legal access for registered medical cannabis patients obtaining cannabis from a licensed provisioning center. Registered patients will soon have three options to choose from to obtain medical cannabis in Michigan:
- Patients can cultivate their own medical cannabis (up to 12 plants);
- Patients can assign a primary caregiver to cultivate medical cannabis on their behalf (up to 12 plants);
- And soon, a registered patient, or that patient’s primary caregiver, can obtain medical cannabis from a provisioning center licensed under the Act.
The new laws create three classes of growers: people who can grow up to 500 plants, up to 1,000 plants or up to 1,500 plants. They also create five classes of licenses – those for growers, testing facilities, transporters, the seed-to-sale tracking and dispensaries. Communities can decide whether and where they’ll allow dispensaries to operate and charge an annual fee of up to $5,000 per dispensary.
Michigan Cannabis Licences
“A licensee that is a commercial entity located in this State that cultivates, dries, trims, or cures and packages cannabis for sale to a processor or provisioning center.”
Class A: 500 plants – Class B: 1,000 plants ‐ Class C: 1,500 plants
“A licensee that is a commercial entity located in this State that purchases cannabis from a grower and that extracts resin from the cannabis or creates a cannabis infused product for sale and transfer in packaged form to a provisioning center.”
“A licensee that is a commercial entity located in this State that purchases cannabis from a grower or processor and sells, supplies, or provides cannabis to registered qualifying patients, directly or through their registered primary caregivers. The term includes any commercial property where cannabis is sold at retail to registered qualifying patients or registered primary caregivers. A noncommercial location used by a primary caregiver to assist a qualifying patient connected to the caregiver through the marijuana registration process of the Department of Licensing and Regulation in accordance with the Michigan Medical Marijuana Act will not be a provisioning center for purposes of the Licensing Act.”
“A licensee that is a commercial entity located in this State that stores cannabis and transports it between cannabis facilities for a fee.”
“A licensee that is a commercial entity that receives cannabis from a cannabis facility or registered primary caregiver, tests it for contaminants and for tetrahydrocannabinol (THC) and other cannabinoids, returns the test results, and may return the cannabis to the facility.”
Michigan regulators released emergency rules that will oversee the state’s soon-to-be regulated medical cannabis market for the next six months. Until this time, Michigan’s sizable medical cannabis program, which boasts in excess of 225,000 registered patients, has relied on a caregiver model. They are served by 40,000 state-approved caregivers, who can grow up to 12 plants for each patient and who are allowed up to five patients each.
Taxes and Fees, Capitalization Requirements
The laws provide for a state tax at the dispensary level of 3% on gross receipts, of which 30% will go to the state general fund and much of the balance will go to local governments and police departments to help cover the cost of enforcement.
License fees will support an extensive bureaucracy that is expected to cost the state about $21 million a year, including 113 full-time state licensing employees, 34 employees with the Michigan State Police to do background checks on applicants, and $550,000 to the Attorney General’s Office for legal expenses.
Businesses will be required to pay an annual license fee to operate in the state. The amount has not yet been set, because it will be based on the number of license applicants. The fee could be as low as $10,000 or as high as $57,000. Local municipalities may also establish an annual fee of up to $5,000 to defray administrative costs.
The total amounts of capitalization based on the type of marihuana facility specified in the application for a state operating license are as follows:
(a) Grower: Class A – $150,000.00.
(b) Grower: Class B – $300,000.00.
(c) Grower: Class C – $500,000.00.
(d) Processor: $300,000.00.
(e) Provisioning Center: $300,000.00.
(f) Secure Transporter: $200,000.00.
(g) Safety Compliance Facility: $200,000.00.
Michigan Recreational Cannabis
On November 6, 2018, voters in Michigan approved Proposition 18-1, a ballot initiative that legalizes cannabis for adults who are age 21 or older, and allows for the sale of flower, concentrates or cannabis-infused edibles.
The measure creates an excise sales tax of 10 percent, which will be levied on cannabis sales at retailers and microbusinesses.
Michigan Cannabis Industry Projections
The medical cannabis business is projected to generate revenues of more than $700 million in 2020, and with the market is opened for recreational use, Michigan could also be top states for cannabis companies to target. It is expected Michigan’s market to reach $1.3 billion in 2021.
Be prepared to present the following items in your application:
- Business details: company name, physical and mailing address, Secretary of State Number
- Funding sources: interested parties and legal entities
- Land Use Compatibility Statement (LUCS)
- Business Operating plan
- Floor plan of proposed facility
- Proof of right to occupy the premises
- Other documentation depending on license type.
We offer “70% ready to go” templates for a cannabis cultivation, processing and retail business in Michigan.