As our culture shifts towards more independent and organic lifestyles, who says you can’t be the next big thing in the recreational cannabis biz? No matter your age, gender, or background – it’s a new industry for everyone, just awaiting fresh faces.
So what is the first step to take in Michigan’s cannabis license application process? Here we’ll breakdown the application process overview and the types of recreational licenses you can apply for. That way you can get started off on the right foot in already uncharted territory for you and the State.
Getting Started: Prerequisites and Applications
To begin your cannabis license application process journey, you’ll have to make it through the prerequisite stage first. The Michigan Marijuana Regulatory Agency (or MRA) requires you to pass the first round of approval prior to even applying for the license you’re seeking to obtain.
Currently, to become licensed recreationally in the State new applications will start off in one of two ways:
- New Applicants that do not already hold an active state operating license under the Medical Marihuana Facilities Licensing Act
- New applicants that do hold an active state operating license under the Medical Marihuana Facilities Licensing Act
The key difference is the way your license will be expedited through the prequalification process:
- If you’re already licensed through the medical marijuana program then your pre-qualification will be expedited.
- If not, you’ll be limited to specific recreational licenses you can apply for. Currently, the following application types are obtainable until the two-year restriction placed onto the industry by MRA is lifted.
- Class A Grower
- Marihuana Microbusiness
- Designated Consumption Establishment
- Marihuana Event Organizer
- Temporary Marihuana Event
- Marihuana Safety Compliance Facility
This restriction allows those businesses that have already been active and successful in the medical industry, to have a ‘leg up’ on out-of-state brands.
In other states, when this restriction wasn’t enforced, legal recreational markets saw a flood of outsiders and big brands overtake the market from actual State citizens. Making it harder for them to succeed in the new industry, overall.
Either way, prequalification to apply includes:
- Background checks of main applicant, and supplemental applicants
- The processing of a $6,000 non-refundable application fee
- A 10% discount applies on application and licensing fees for applicants who have been a primary caregiver under the Michigan Medical Marihuana Act between 2017-2018 for at least two years.
Other license and application discounts that applicants can take advantage of, have the added benefit of addressing social injustice surrounding marijuana as a whole. For those interested in taking part of MRA’s Social Equity Program, you can receive application and licensing fee reductions by meeting the following criteria –
- Maintained residency in a ‘disproportionately impacted community’ for at least five cumulative years within the last ten years. A total of 184 communities in Michigan, qualify for this requirement. The location must have marijuana-related convictions that are greater than the state median, plus 20%+ of their population living under the federal poverty level.
- 25% fee reduction
- Conviction of a marijuana-related offense.
- Misdemeanor convictions 25% fee reduction.
- Felony convictions 40% fee reduction.
For applications, you’ll need to decide whether you’re applying as an entity, i.e. a limited liability company, corporation, partnership, or as an individual, i.e. a sole proprietor. This will also determine which supplemental applicants are required. Ultimately, the supplemental applicants will depend on your business type’s structure. Which the MRA website outlines clearly for common entities here.
To apply as a sole-proprietor or entity, the State has compiled comprehensive instructions on how to do so. Including a list of documents you’ll need when applying online, or in paper form. During the prequalification application process you will be asked to indicate the type of license you’ll be applying for once approved. This won’t be permanent until you’ve been prequalified and move on to the second part of licensing, which includes paying for your final license fee.
Licensing Types: Which is best for you?
Speaking of license fees, this is where the big decision for your future canna-biz will begin. Currently, the MRA has 10 types of recreational licenses that determine how your weed business can operate. Each license also requires an additional fee, on top of the $6,000 fee that was initially paid to begin the cannabis licensing application process.
For you to make an informed choice, we’ll breakdown each type of recreational license and what each entails individually.
Marihuana Grower License
The Michigan marihuana growing licenses available for recreational cultivation are broken down per total plant quantity. These types of licenses allow owners to sell their flower directly to licensed retail storefronts, or to processors extracting for recreationally licensed products.
- Class A – $4,000 Fee: 100 plants can be cultivated at one time.
- Class B – $8,000 Fee: 500 plants can be cultivated at one time.
- Class C – $40,000 Fee: 2,000 plants can be cultivated at one time.
Marihuana Microbusiness License – $8,000 Fee
A micro business is a ‘self-enclosed small business’ that’s permitted to grow, process, distribute and sell products gained from a maximum of 150 plants. Meaning from start to finish – growing, processing, and selling must all be done ‘in-house’.
Per the MRA, Microbusinesses are not permitted to sell their product to other licensed establishments. As a microbusiness, you’re also limited to just one storefront and cannot obtain any other type of recreational license.
Marihuana Processor License – $40,000 Fee
Marihuana Processors in Michigan are permitted to extract cannabis compounds (i.e. concentrates) cultivated by licensed growers. The license includes the ability to process the compounds into sellable goods, at licensed retail storefronts.
Marihuana Retailer License – $25,000 Fee
The MRA’s retailer license allows licensees to open storefronts, for the purchasing and selling of marihuana goods.
Marihuana Safety Compliance Facility License – $25,000 Fee
This license is for labs and testing facilities that test for contaminants and verify marihuana products for regulatory purposes prior to being sold.
Marihuana Secure Transporter – $25,000 Fee
The Marihuana Secure Transporter license allows companies to transport and handle marihuana products from growers, processors, compliance facilities and retail storefronts.
Designated Consumption Establishment License – $1,000 Fee
The MRA’s designated consumption establishment license is designed for businesses like restaurants or lounges that want to allow or permit marijuana consumption at their location.
Marihuana Event Organizer License – $1,000 Fee
Marihuana event organizer licensees have the ability to organize and execute special industry events like trade shows, and social gatherings where marihuana is available or consumed.
Keep in mind, beyond the initial application fee, and the licensing fee, each year every license will be subject to a renewal fee. Another factor to take into consideration is cities and townships that have set limits on the number of recreational businesses allowed within their town limits. For instance, some townships may only permit one class C grower, while others might not allow growing licenses at all.
The MRA took their time in making their website a comprehensive source for potential applicants. On their site, you can find step-by-step instructions to applying, lists of Township regulations, established licenses, and other valuable resources for the process.
The Next Big Thing In The Biz: Your Canna-Business
Now that you know the basics of the cannabis license application process in Michigan, you’re one step closer on your journey to becoming the next big thing. Once you’ve chosen which type of recreational license is for you, the MRA’s detailed instructions make the recreational application process that much easier along the way.
Like in any industry, knowledge is power in the canna-biz too. So stay tuned for all the latest news and updates here in Michigan, and nationwide. As they say, the more you know, the more you can grow.
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