The fees for those categories are: $8,000 for a Class B grower of up to 500 plants; $40,000 each for a Class C grower of up to 2,000 plants and an excess marijuana grower of up to 2,000 plants per license for an owner who wants to become a mega grower of both medical and recreational pot; $40,000 for a processor, and $25,000 each for a secure transport and retail shop license.
She’s one of the first marijuana business owners in Detroit and has nearly a year of business in the new industry under her belt. So she has to ensure that renewing her medical license goes smoothly and prepare for the emerging recreational market that is right around the corner.
The state will begin taking applications for the recreational marijuana licenses on Nov. 1 and those who already have a medical license will get fast-tracked because they’ve already gone through background checks and have an up-and-running business.
The cost of a license will go down for both medical and recreational marijuana businesses. When the state set the cost of recreational licenses, which range from $1,000 to $40,000, they lowered the medical marijuana license fees to match. The $6,000 application fee will still apply to all license categories in both the medical and recreational sides
The existing categories for medical marijuana licenses remain mostly the same for the recreational market: two classes of growers, processors, testing facilities, retail stores and secure transporters. A new category — excess marijuana grower — has been added to accommodate people who want to stack the large grow licenses in order to become a mega-grower of both medical and recreational marijuana.
There are six new categories of licenses for the recreational market that won’t require a potential business owner to already have a medical marijuana license:
She was one of about 100 people attending a Marijuana Regulatory Agency meeting in Detroit on Thursday to learn how to apply for one of the recreational marijuana licenses that will open the market later this year to anyone 21 and older, beyond the nearly 300,000 people who have medical marijuana cards.
“I want to do recreational and probably also in the grow part because those two go hand in hand,” the Detroit resident said.
Meah will have a leg up because medical marijuana business license holders will have the first crack at licenses for most of the license categories in the recreational market for at least one year. Through mid-August, 296 medical marijuana licenses have been awarded by the state: 121 growers; 15 processors; 144 dispensaries; 10 secure transporters and 6 testing facilities.
That means you’re going to want to be growing indoors, or outside in a shed or grow house. Keep in mind this is Michigan — the weather changes rapidly.
As governing state laws spell marihuana with an “h,” BMR legal communication and references to statutes in relation to the Michigan Medical Marihuana Act or the Michigan Medical Facilities Licensing Act or the Michigan Regulation and Taxation of Marihuana Act – and the corresponding administrative rules will use an “h” in the spelling of Marihuana. In non-formal communication, “j” will generally be used.
Michigan is first in Midwest
Here are the license types that are offered:
For more coverage of marijuana in Michigan, go here.
According to the new Michigan law, a person who is at least 21 years old is allowed no more than 2.5 ounces of marijuana within his or her place of residence unless any excess marijuana is stored in a container or area equipped with locks “or other functioning security devices that restrict access to the contents of the container or area.”
While your prequalification is in process, it’s usually a good idea to start looking for property to locate your cannabis facility. Under the MMFLA and MRTMA, whether and where you can locate your cannabis business is up to each individual municipality. Unfortunately, most Michigan municipalities do not allow licensed cannabis companies to operate within their borders.
This is also the time to decide how to structure your cannabis business. When drafting an operating agreement or setting up a corporation’s bylaws, you will need to decide how the business will actually be run. In deciding this, you will need to be prepared to answer a lot of questions. For example, will you need to bring on investors? Are you splitting up responsibilities within the company with your team? If you have partners, how are major decisions going to be made? What’s the best tax status for your business?
Step 5: Identify and Municipally License Your Cannabis Property
Let’s be honest, if it was easy to start a legal cannabis business in Michigan, everyone would do it. But the business opportunities the Michigan cannabis industry presents are especially attractive not because it’s an easy business to get into, but because it’s can be quite difficult. The stakes are high, and the competition can be fierce. There are likely hundreds of companies vying to be the next Weedmaps, and we’ve seen situations where there are dozens of cannabis companies going after only a handful of available municipal licenses.
What that means is that you could launch your own cannabis brand, whether that be flower, cartridges, edibles, etc., without the immense start-up costs of obtaining a Michigan cannabis license under the MMFLA or MRTMA. What you will need is an lawyer with experience in negotiating cannabis licensing and white label deals, some start-up capital, and a very persuasive business plan or pitch deck. You don’t need to be a celebrity to start a cannabis brand—in fact, celebrity brands don’t have the best track record in this industry. What you do need is good branding concept, and most importantly, the work ethic and marketing budget to build that brand into a household name. I work with several such companies, and let me tell you, it’s much easier said than done, but that doesn’t mean it’s not possible.
Before getting started, it it’s important to talk about what laws actually govern legal cannabis businesses in Michigan. There are three main marijuana laws—the Michigan Medical Marihuana Act, or “MMMA”; the Medical Marihuana Facilities Licensing Act, or “MMFLA”; and the Michigan Regulation and Taxation of Marihuana Act, or “MRTMA.” The MMMA authorizes “caregivers” to grow up to 12 plants per registered patient, for a maximum of 72 plants, but does not authorize the sale of marijuana except to the caregiver’s registered patients. The MMFLA, on the other hand, allow for the licensing of medical marijuana businesses and allows dispensaries to sell to any registered patient, including out-of-state patients in some cases. Finally, the MRTMA, or “adult-use” licensing law, allows for the licensing of recreational marijuana businesses and the sale of marijuana to anyone 21 years and older.
Now that you’ve chosen your niche and have a plan, the next step is to form your company and choose your team. There are many considerations to take into account when selecting your business structure. While forming LLCs and corporations is incredibly easy in Michigan, selecting your team and properly structuring your company are not quite as easy. For plant-touching companies, you will at a minimum need a cannabis business attorney and accountant who specializes in cannabis. You will probably want to set up consultations with several professionals and companies providing these or other services before choosing the right attorney or accountant for your project.