Michigan Dispensary Laws

PUBLISHED DECEMBER 18, 2020 - UPDATED JANUARY 29, 2021

In November 2018, Michigan dispensary laws changed when voters approved the Regulation and Taxation of Marijuana Act, making the Great Lake State the 10th in the U.S. to legalize recreational cannabis. Although medical marijuana has been legal in Michigan since 2008, there was no allowance for dispensaries; however, the new legislation set up a framework for the licensing and operating of medical marijuana dispensaries, which Michigan refers to as “provisioning centers,” along with adult-use retail stores.

The Michigan Marijuana Regulatory Agency, or MRA, is tasked with overseeing cannabis business licensing. Initially, it was announced that for the first 24 months, applications would only be accepted from currently licensed medical marijuana operators. But, from March 2021, Michigan will start accepting applications for recreational cannabis licensing opportunities from entrepreneurs who did not previously hold medical marijuana licenses.

Moreover, municipalities that had previously opted not to participate in legal marijuana will now have an opportunity to allow recreational cannabis. Detroit finally 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 have been 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.

Below, we’ve provided answers to as many questions as possible concerning cannabis retail licensing and dispensary laws in Michigan, and we will continue to update this page regularly as new details emerge. This page is informational only and should not be considered legal advice.

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Michigan Cannabis Laws

An overview of the medical and recreational marijuana laws in Michigan.

Who is able to purchase cannabis in Michigan?

Michigan residents with a state-approved medical marijuana patient card can purchase cannabis from medical marijuana dispensaries, called provisioning centers.

Adult-use marijuana was approved by Michigan voters in November 2018, meaning adults aged 21 and older are legally allowed to purchase, possess, and consume cannabis.

Are there qualifying conditions?

Yes. The list of conditions that qualify for medical marijuana in Michigan can be found here.

Is home growing allowed in Michigan?

Yes; medical marijuana patients can cultivate up to 12 cannabis plants at home. Additionally, under the Michigan Regulation and Taxation of Marijuana Act, adults aged 21 and older may cultivate up to 12 cannabis plants at home.

Retail Cannabis Licensing in Michigan

Everything you need to know about opening a retail cannabis location in Michigan.

What state agency is in charge of cannabis licensing in Michigan?

The Michigan Marijuana Regulatory Agency, or MRA for short.

What is the process for obtaining a medical marijuana dispensary license in Michigan?

In Michigan, medical cannabis dispensaries are called “provisioning centers.” MRA uses a two-step application process for all marijuana facility licensing; the first step is prequalification, and includes a background check of all persons associated with the application.

The second step is license qualification, which includes providing more information specific to the type of license sought — in this case, a provisioning center license.

What costs are associated with applying for a medical marijuana provisioning center license in Michigan?

There are two fees associated with the provisioning center licensing process. The first is an application fee of $6,000, which must be submitted before the application can be processed.

The second fee is an annual regulatory assessment, which must be paid prior to the license being issued. The regulatory assessment for Fiscal Year 2020 (beginning October 1, 2019 and ending September 30, 2020) for a new provisioning center license is $44,000.

What is the process for obtaining an adult-use marijuana retail license in Maine?

Michigan's MRA began accepting adult-use cannabis facility license applications on November 1, 2019 only from persons currently holding a medical marijuana operating license.

Beginning March 1, 2021, the MRA will end the requirement to hold a medical Provisioning Center license first, and open applications to everyone, with discounts for social equity qualifying applicants.

The MRA follows the same two-step application process for adult-use marijuana licensing. The first step is prequalification, which includes the submission of all application materials, background checks, and payment of the application fee. The second step includes a review of the proposed retail establishment, including a physical inspection, as well as payment of the licensure fee once approved.

You can apply online, view application resources, and download application forms at the MRA’s adult-use marijuana application page.

You may also need to get approved and licensed by your municipality.

What costs are associated with applying for an adult-use cannabis retail license in Michigan?

There are two fees associated with the adult-use marijuana retail license in Michigan. The first is an application fee of $6,000, which must be submitted before the application can be processed. Once approved for a license, the initial licensure fee for an adult-use marijuana retailer is $25,000.

Annual renewal fees range from $30,000 to $50,000 and are based on gross sales compared to other license holders.

Additional fees may be imposed at the municipal level; check with your local municipality to find out more.

Is there a restriction on how many licenses one entity can hold?

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.

Michigan Medical Dispensary and Cannabis Retail Establishment Laws

Learn how to remain compliant with Michigan’s cannabis retail laws.

Where can a marijuana dispensary or retail establishment be located?

Under 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 MRA has more information online regarding specific communities.

Who can Michigan marijuana retailers sell to?

Medical marijuana provisioning centers in Michigan may only sell cannabis to patients holding an active medical marijuana patient identification card. Licensed adult-use marijuana retailers may sell cannabis to adults aged 21 and older.

What can a Michigan marijuana retailer sell?

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

What are the purchase and possession limits for Michigan adult-use cannabis retail customers?

Adults aged 21 and older may purchase no more than 2.5 ounces of cannabis or equivalent product in a single transaction, with no more than 15 grams in the form of cannabis concentrate.

Adults aged 21 and up may possess up to 2.5 ounces of cannabis or equivalent product away from home, and up to 10 ounces within their home. Adults may possess up to 15 grams of cannabis concentrate at any given time.

What are the purchase and possession limits for medical marijuana patients?

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

What taxes are collected on retail cannabis in Michigan?

Medical cannabis sales in Michigan are subject to the standard state sales tax of six percent, plus an additional three percent excise tax. Recreational cannabis will be subject to a 15 percent excise tax on top of the standard sales tax.

Can medical marijuana and recreational cannabis be sold in the same dispensary?

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 includes different labeling, tax rates, customer verification procedures, etc.

Is delivery allowed and what are the restrictions on where medical marijuana can be delivered?

A provisioning center may offer home delivery once the facility's delivery procedures have been provided to and approved by the MRA. Orders must be received through a secure website that authenticates access by a registered qualifying patient. Medical marijuana can be delivered to the home of any registered qualifying patient, even if the patient's jurisdiction does not allow dispensaries. For more information about home delivery requirements and procedures, please see here.

Is consumption of cannabis allowed in Michigan dispensaries?

A marijuana establishment 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 consumption of marijuana products on-site. These establishments may not serve food or alcohol.

What is required of adult-use cannabis retailers in Michigan prior to conducting sales?

Michigan adult-use cannabis retailers must:

  • Only sell product 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 by means of a government-issued photo ID
  • Verify that the sale will not exceed the transaction limits

Cannabis Tracking and Reporting in Michigan

Every regulated cannabis market has its own tracking and reporting requirements. Find out how Michigan will monitor commercial cannabis activity here.

What are the tracking, reporting, and inventory control requirements for Michigan cannabis retailers?

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 clearly identifies all required criteria pertaining to the specific batch subject to the recall

What is the official state cannabis monitoring system?

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

Is Cova compliant with Michigan’s cannabis retail reporting requirements?

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
ron-segev

RON SEGEV

Cannabis Business Lawyer & Founding Partner, Segev LLP

Legally reviewed by

RON SEGEV

Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.

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