Michigan Cannabis Laws

The Michigan Cannabis Regulatory Agency, or CRA for short is responsible for overseeing all cannabis businesses as well as their licenses.

Under Michigan state law, cannabis retail establishments cannot be located in areas zoned exclusively for residential use or within 1,000 feet of any school for grades K-12. However, local municipalities may reduce this distance requirement or impose additional location requirements as they see fit. Some municipalities have opted to restrict or prohibit the opening of retail stores.

The process for obtaining an adult-use dispensary license in Michigan is divided into two steps. The first step is prequalification which involves background checks on both the main applicant and supplemental applicants. Applicants seeking to participate in the Social Equity Program must apply with the Social Equity Program before this step.

After this, candidates can begin step 2 which involves submitting their establishment license applications. The Cannabis Regulatory Agency reviews various documents such as business specifications, proof of financial responsibility, municipality information, and general employee information. The physical marijuana establishment will also undergo an inspection by the CRA within 60 days of submission of a complete application.

The CRA has published an in-depth guide with application instructions for the adult-use marijuana establishment licensing application process.

There are two fees associated with the retailer licensing process. The first is a nonrefundable application fee of $3,000, which must be submitted during step 1 of the application process (prequalification).

Once approved for the state license, applicants must pay an initial licensure fee for their relevant license type. For adult-use dispensaries, this fee is $15,000 as of April 2024.

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The state will not set a limit on the number of licenses issued; however, local municipalities may choose to restrict or limit the type and number of facilities licensed in their jurisdictions.

Marijuana retailers in Michigan may sell cannabis and cannabis products including flower, concentrates, edibles, infused products, seeds, and clones.

Medical marijuana patients in Michigan may purchase up to 2.5 ounces (approximately 70 grams) of cannabis or equivalent product daily. The monthly purchasing limit for patients is 10 ounces of cannabis or equivalent product.

Medical patients and their caregivers are only allowed to purchase cannabis from a state-approved medical provisioning center (or a retail dispensary with a medical cannabis license).

Yes, Michigan does indeed have a Social Equity Program overseen by the CRA. Like other states, Michigan’s program is designed to promote participation from communities that have been disproportionately impacted by cannabis prohibition and enforcement.

As part of the program, qualified candidates can apply for the Social Equity Grant Program, Social Equity All-Star Program, and the Joint Ventures Pathway Program (JVPP).

In 2020, Detroit announced the rules for allowing licensed adult-use marijuana sales with a conscious effort toward giving social equity applicants a fair opportunity as well. 50% of the licenses were reserved for “Detroit legacy applicants” who have lived in the city for 10 of the past 30 years and may have a marijuana conviction or for 13 of the past 30 years and are categorized as low-income. Discounts of up to 75% are also available to applicants belonging to a disproportionately impacted community on licensing fees and properties owned by the city land bank.

The CRA has laid out the minimum requirements to qualify for the Social Equity Program here.

Cannabis dispensaries are required to pay an excise tax of 10% called the Marihuana Retailers Excise (MRE) Tax as well as the standard 6% sales tax on all cannabis retail sales.

Yes, a marijuana establishment in Michigan can sell both medical marijuana and adult-use recreational cannabis, provided those products are physically separated in the store. A dispensary will also have to follow all distinct regulations regarding the sale of each of those products, which include different labeling, tax rates, customer verification procedures, etc.

Retail dispensaries in Michigan are required to take the following security measures according to the Michigan Administrative Code Regulation R. 420.207:

• Dispensaries must have controlled access areas and restricted access areas, with non-residential locks on all doors and windows.
• Dispensaries are mandated to have a video surveillance system covering various areas within the premises, including where marijuana products are handled, sold, stored, and destroyed.
• Recordings must be retained for at least 30 days and made available for inspection by the regulatory agency. Additionally, an alarm system must be maintained, with detailed records available upon request.
• Dispensaries must also maintain logs of surveillance activities and ensure the surveillance system's integrity through failure notification mechanisms.

Delivery of marijuana is allowed in Michigan, with restrictions on where and how it can be delivered. The Michigan Administrative Code Regulation R. 420.207 lays out the following rules:

• A marijuana sales location licensee may engage in delivery upon approval by the agency of their delivery procedures.
• For medical sales locations, products can be delivered to a patient's residential address, while for adult-use sales locations, delivery can be made to individuals 21 or older at a residential address or designated consumption establishment.
• Delivery procedures must include accepting online orders, maintaining inspection-ready records, and employing qualified delivery staff.
• Deliveries are subject to purchase limits, age verification, and recording in the statewide monitoring system. Delivery employees must carry the required information, have secure communication, and comply with inventory and delivery protocols.
• Deliveries must be timely, and within business hours, and products must be securely stored during transit. The delivery process begins when the employee leaves the licensed business and ends upon return, with records of each delivery maintained for agency inspection.

Also Read: Rules for Starting a Cannabis Delivery Service in Michigan

A cannabis dispensary can apply for a license as a designated consumption site. Only dispensaries with a designated consumption site license can have smoking lounges or otherwise allow the consumption of marijuana products on-site. These establishments may not serve food or alcohol.

Michigan adult-use cannabis retailers must:

• Only sell to individuals aged 21 years or older after the product has been tested and bears the required retail label
• Enter all transactions, current inventory, and other required information into the statewide monitoring system through a third-party inventory control and tracking system such as Cova POS
• Verify customers are 21 years of age or older using a government-issued photo ID
• Verify that the sale will not exceed the transaction limits

Michigan has chosen Metrc as its official statewide marijuana monitoring system.

Michigan’s Marijuana Tracking Act requires the establishment of a statewide monitoring system that can integrate with third-party inventory control and tracking systems such as Cova’s Cannabis Dispensary POS Software in order to allow:

• Verification of age and validity of medical marijuana patient card
• Retention of a record of the date, time, quantity, and price of each sale or transfer of cannabis
• Determination of whether a particular sale or transfer will exceed the permissible limit

Additionally, Michigan's Adult-Use Marijuana Emergency Rules state that licensees must use a third-party inventory control and tracking system that is capable of interfacing with the statewide monitoring system to track:

• All cannabis plants, products, packages, purchase totals, waste, transfers, conversions, sales, and returns
• Lot and batch information throughout the entire chain of custody
• Complete batch recall that identifies all required criteria about the specific batch subject to the recall

Yes. Cova’s dispensary POS and inventory management system includes all the features needed to keep cannabis retailers compliant, including:

• ID scanner for age and patient card verification
• Integrated inventory and sales tracking and reporting
• Built-in product equivalency conversions and purchase limit enforcement