Updated on December 11, 2020.
In November 2018, Michigan voters had 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.
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Michigan residents with a state-approved medical marijuana patient card can purchase cannabis from medical 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.
Yes. The list of conditions that qualify for medical marijuana in Michigan can be found here.
The Michigan Marijuana Regulatory Agency, or MRA for short.
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.
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.
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.
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.
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.
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.
Marijuana retailers in Michigan may sell cannabis and cannabis products including flower, concentrates, edibles, infused products, seeds, and clones.
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.
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.
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.
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.
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.
Michigan adult-use cannabis retailers must:
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:
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:
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.