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How to Open and Run a Cannabis Dispensary in Michigan


Michigan was the 10th U.S. state to legalize recreational cannabis, officially opening the door for medical and recreational marijuana retail sales in late 2018. Managed by the Michigan Marijuana Regulatory Agency (MRA), the MI cannabis dispensary laws outline all regulations for prospective and existing dispensaries.

In the state of Michigan, medical marijuana dispensaries are referred to as “provisioning centers.” Initially, only dispensaries that had medical marijuana operating licenses were permitted to apply for adult-use licensing. But now, the application process has been opened to everyone, and Michigan's cannabis retail industry is booming.

If you are interested in opening a cannabis dispensary in Michigan, reliable information will be among your greatest assets. Proper preparation is essential when applying for a MI dispensary license and for succeeding in this highly regulated industry. You must remain compliant with all laws and regulations while operating a cannabis dispensary in Michigan. For example:

  • A dispensary owner is responsible for knowing that recreational cannabis sales can only be made to adults aged 21 and over, while medical marijuana provisioning centers must limit access to licensed MMJ patients.
  • The sale limit is 2.5 ounces of cannabis or 15 grams of cannabis concentrate per person.

Other details, including the requirements for taxes, inventory control, tracking, and reporting, are crucial as well. Continue reading for more details about starting a dispensary in Michigan, including a summary of licensing procedures, reporting regulations, and more.

Michigan Marijuana Retail Landscape

Although medical marijuana was legalized in 2008, allowances for medical dispensaries were only created in recent legislation. As a result, there is ample opportunity for growth-minded entrepreneurs who are prepared to stake their claims.

Additionally, the MRA’s Social Equity Program implements provisions to encourage diversity in the cannabis industry, specifically aiming to provide opportunities for individuals from communities disproportionately impacted by cannabis laws pre-legalization. Eligible participants can qualify for reduced dispensary licensing fees.

How to Open a Dispensary in Michigan

Developing a sound business plan is the first step in opening your dispensary. Plan for a minimum of 6 to 12 months before your opening, and set aside enough time for the various processes involved (applications, licensure, etc.). You must also research how much it costs to open a dispensary in Michigan so that you can plan four finances accordingly. The type of license you need will depend on the facility you plan to operate. There are various types of dispensary licenses in MI, including those for medical and recreational marijuana.

Michigan Marijuana Facility Licenses

There are two primary types of marijuana facilities in MI: medical marijuana dispensaries (called “provisioning centers”) and recreational dispensaries.

Recreational Marijuana License Types

Recreational marijuana laws in Michigan were established by the MRTMA law, and allow for many license types, such as:

  • Recreational marijuana cultivation (Classes A, B, and C)
  • Safety compliance facilities
  • Secure transporters
  • Designated consumption establishments
  • Microbusinesses
  • Marijuana event organizers/temporary event licenses
  • Marijuana retailers

Medical Marijuana License Types

The MMFL Act is Michigan’s legislation for medical marijuana and provides provisions for licenses types that include:

  • Cultivation and growing (Classes A, B, and C)
  • Extraction and processing
  • Secure transporters
  • Provisioning centers
  • Safety compliance facilities

Managing a Successful Dispensary in Michigan

Once you determine and secure the proper license, it is time to begin preparing to launch your dispensary. Even with a license in hand, failing to prepare properly can prevent your business plan from ever taking off. Here are the most important steps in opening and managing your MI dispensary:

1. Make a Plan to Stay Compliant

Compliance should be your primary focus as a dispensary owner because failure to stay in line with regulations can result in closure or loss of license. The state enforces strict regulations for dispensary building locations, sales, tracking, inventory control, etc. You must equip your dispensary and its staff with the necessary tools to remain compliant. For example, you should develop a clear protocol for adhering to MI marijuana dispensary laws such as:

  • Verifying customer age, identification, and/or medical marijuana card if applicable
  • Enforcing MI cannabis purchase limits
  • Tracking all transactions and inventory
  • Reporting to Metrc- the statewide seed-to-sale system

2. Be Proactive with Inventory Management

The state expects all dispensaries to utilize a third-party inventory control and tracking system to report a detailed assortment of data to the official Metrc system. Inventory tracking must include all plants, products, and packages, as well as a myriad of additional data. Lot and batch information must be documented, and you must select a cannabis inventory management system that meets all MI requirements, including the ability to seamlessly integrate with Metrc. Cova is fully compliant with these rules, and our automated capabilities will keep your inventory processes stress-free.

3. Choose a Robust Cannabis POS System

When you’re shopping around for cannabis retail POS systems, reliability and performance are key. Because your dispensary must track and report a large amount of data, you’ll want to invest in a system that saves you time and effort, and reduces the risk of human error. Cova is an ideal option for cannabis POS systems in Michigan, especially because our POS has 2-way integration with METRC. Cova cannabis retail software has features to address all your needs, including ID verification, fully-integrated tracking and reporting, and built-in purchase limit enforcement.

4. Choose your Dispensary Hardware

Make sure your dispensary has all of the hardware essentials, and that all items are fully compatible with your preferred POS software. You’ll need items such as scanners, scales, tablets, and drawers.

5. Consider Offering Delivery Service

In Michigan, medical marijuana delivery is permitted once a dispensary’s procedures have been approved by the MRA. If you are opening a medical provisioning center, incorporating delivery can be a smart way to stay ahead of the competition.

6. Put Customers First & Build your Brand

As with any business, differentiating your dispensary brand from competitors will be incredibly important. Demonstrate to customers that your dispensary knows and understands their unique needs- and utilize as many tools and resources as possible to learn about your niche market. For example, Cova's data analytic tools for dispensaries empower you with invaluable metrics that highlight performance points like traffic patterns, top-selling products, and more. Make your dispensary unique and improve the customer experience with the help of excellent data tracking and analysis. Not only will your customers appreciate the same, but you can look forward to increased profitability in the long run.

Choose the Right Cannabis Technology Partner

Opening a dispensary in Michigan can be an outstanding opportunity to join the growing cannabis market. The potential for success is significant, but first, you must set up your dispensary with the essentials. Our cutting-edge cannabis POS and inventory management software is a wise investment for Michigan dispensary owners, as it streamlines operations and makes compliance as straightforward as possible. Learn more about how Cova’s cannabis retail POS system can support your goals, or sign up for a free cannabis POS software demo today and discover how we can help you establish a successful dispensary business in Michigan.


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