Updated on May 13, 2019. Legally reviewed by Ron Segev, Cannabis Business Lawyer and Founding Partner of Segev, LLP.
In November 2018, Michigan 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 sets 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 Department of Licensing and Regulatory Affairs, or LARA, is tasked with overseeing cannabis business licensing. Currently, LARA is only accepting applications for medical marijuana dispensary licenses, but the agency will begin accepting recreational retail license applications by December 6, 2019. For the first 24 months after the department begins accepting recreational cannabis retail license applications, they will only be accepted from those who are currently licensed to sell medical marijuana.
Developments to the state’s regulatory framework and licensing processes are still ongoing. We’ve provided answers to as many questions as possible concerning cannabis retail and dispensary laws in Michigan below, and we will continue to update this page regularly as new details emerge.
Currently, Michigan residents with a state-approved medical marijuana patient card can purchase cannabis from medical dispensaries, called provisioning centers.
Adult-use cannabis was approved by Michigan voters in November 2018; however, the legal framework for the state’s recreational cannabis program is still being developed, and commercial sales likely won’t begin until early 2020.
Michigan residents over the age of 18 can apply for a medical marijuana patient card by following these steps:
Yes. The list of conditions that qualify for medical marijuana in Michigan includes:
The Michigan Department of Licensing and Regulatory Affairs, or LARA for short.
In Michigan, medical cannabis dispensaries are called “provisioning centers.” LARA uses a two-step application process for all marijuana facility licensing; the first step is prequalification, and includes a background check of all applicants 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.
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 amount of the regulatory assessment fee is still being determined by LARA; the agency has stated that the fee will depend on the total number of licenses being issued, and could be as low as $10,000 or as high as $66,000.
Because the legal framework for Michigan’s adult-use cannabis market is still under development, applications for recreational marijuana retail licenses are not yet being accepted. The legislation states that LARA must begin accepting applications by December 6, 2019.
Under Michigan’s law, LARA will only accept recreational cannabis retail license applications from persons currently holding a medical marijuana provisioning center license. This restriction will remain in effect for the first two years after LARA begins accepting adult-use cannabis facility license applications.
This means that in order to be eligible for an adult-use cannabis retail license in Michigan, you must first obtain a medical marijuana provisioning center license.
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.
Learn how to remain compliant with Michigan’s cannabis retail laws.
Currently, marijuana provisioning centers in Michigan may only sell cannabis to patients holding an active medical marijuana patient identification card.
Provisioning centers in Michigan may sell cannabis and cannabis products including flower, concentrates, edibles, infused products, seeds, and clones.
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.
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.
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.
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:
Michigan has chosen METRC as its official statewide marijuana monitoring system.
Yes. Cova’s dispensary POS and inventory management system includes all the features needed to keep cannabis retailers compliant, including:
First, no advertisements for anything cannabis-related can be attractive to minors (no cartoon characters or public figures appealing to a younger age group) or promote underage or out-of-state consumption. Second, no product can claim any therapeutic or curative effects. Lastly, any cannabis advertisement must include the following government warnings:
"This product has intoxicating effects and may be habit forming.";
"Marijuana can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of this drug.";
"There may be health risks associated with consumption of this product."; and
"For use only by adults twenty-one and older. Keep out of the reach of children.”
Each licensed retail location can have two signs at their location with their business name or trade name. These signs cannot be larger than 1,600 square feet (measured from the outer frame). No signs can be on the road pointing in the direction of the dispensary, they can only be affixed or hanging from the building or windows of the actual storefront.
The signs can include the business name, location and identify the nature of the business. It cannot have any photos or depictions of cannabis and it cannot be appealing to minors.
A cannabis dispensary can advertise on billboards with some restrictions. First, the billboard can only contain the same information as signage on the storefront (i.e., name of business, address and nature of business). It cannot contain any photos or depictions of the cannabis plant (this includes any logo with a cannabis leaf) or appeal to minors. No matter the design, the billboard must say that cannabis can only be purchased and possessed by adults over 21 years old.
No, dispensaries cannot give away any product or coupons. They can, however, encourage customers to sign up for an email or text list and offer specials that way.
No, a dispensary is only allowed to sell legal cannabis products and paraphernalia. But branded merchandise for a dispensary can be sold on their website or through a separate entity.
Yes, a dispensary is allowed to advertise in print publications, but with a few restrictions. The publication cannot target or distribute to an audience out of state or underage. And the content of the advertisement must follow the same rules as billboards and signage (no cannabis depictions or photos, cartoon characters or anything appealing to minors and must include government warnings). Local jurisdictions are able to establish additional advertising rules, so always check for relevant local laws.
A retail cannabis business can have a website, but it cannot appeal to or solicit anyone under the age of 21. You can sell branded non-cannabis merchandise on your website, but all cannabis products must be purchased in store.
Yes, a dispensary can host or sponsor an event, but only if attendees are over 21 years old. They cannot have product on hand, neither as a free gift or sold.
Rules and regulations regarding advertising for Washington cannabis companies are constantly changing. You can view the WSLCB’s Q&A on advertising here.
Cova POS software provides complete seed-to-sale tracking functionality and has a number of built-in features designed to help you automatically comply with the legal regulations in your state/province. For example, the Cova POS system automatically monitors:
To ensure that you always maintain an expedient transaction pace and keep lines moving, Cova comes with a built-in offline sales processing mode that enables continuous access to critical functions even when your Wi-Fi or internet connection is unavailable. Once connectivity is restored, all transactions performed in offline mode are synchronized with the state’s reporting system, data is backed up, and reports and inventory records are adjusted accordingly.
By choosing a POS system with built-in tax reporting functionality, you’ll always know exactly how much tax you need to pay.
There are several reasons why a cannabis-specific POS is ideal for your operation—but the most important one is compliance management. Because traditional retail operations and pharmacies don’t have the same government-mandated compliance requirements, their POS systems aren’t built to manage the complexities involved with track and trace reporting and the other aspects of state compliance.
With the industry still in its infancy, regulations are bound to change. At Cova, our team keeps up with industry-wide and state-specific changes so that our developers can quickly made necessary software updates—and so you never have to worry about remaining compliant with the latest regulations.
Absolutely! Cova software is built on technology that has the ability to dynamically scale with your needs. Microsoft’s Cloud Computing Platform, Azure, automatically detects instances of heavy traffic (such as sales on 4/20) and assigns further servers and computing power as necessary to compensate—allowing you to process sales without interruption, even during the busiest retail periods.
Although technically you are not mandated to comply with the new law and regulations until July, it’s a good idea to implement a compliant POS now so you don’t have to switch later.
With Cova, you can easily stay compliant with California’s inventory reconciliation requirement by printing the Inventory-on-hand report and checking it against your physical inventory. You can make any necessary adjustments directly into the POS, which will then sync the data across your network.
Cannabis Business Lawyer & Founding Partner, Segev LLP
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.