Adult-use cannabis sales kicked off in Michigan on December 1, 2019, nearly one year after voters approved the Michigan Regulation and Taxation of Marihuana Act (MRTMA), which passed in November of 2018. Despite minimal retailers to purchase from due to municipal opt-outs, adult-use cannabis transactions reached $6.5 million within the first month. The state’s House Fiscal Agency estimates that annual adult-use cannabis sales could approach $949 million when the market matures, and Marijuana Business Daily is estimating closer to $1.4 to $1.7 billion.
The Michigan Department of Licensing and Regulatory Affairs’ (LARA) Marijuana Regulatory Agency (MRA) regulates the state’s medical and adult-use marijuana facilities and licensees, including growers, processors, transporters, provisioning centers, and safety compliance facilities. For the first two years of the adult-use program, until November 2021, only existing medical cannabis operators can apply for a recreational license according to the Medical Marijuana Licensing Facilities Act (MMLF) and under the established emergency rules, which are in effect until July 3, 2020. For Class A Cultivators and Microbusinesses, there is no medical license restriction, but owners will need to be Michigan residents for the first two years of the program. Michigan Officials will have the option to remove these requirements in November 2020 if they deem it necessary.
Michigan has not placed caps on the number of adult-use licenses available, but as previously mentioned, they did grant individual municipalities the ability to opt-out of the industry. As a result, approximately 80% of Michigan’s cities and towns in counties across the state have chosen to prohibit adult-use retailers, with only 42 licensed recreational cannabis businesses as of February 3, 2020. Comparatively, there are just over 200 medical provision centers in the state. Michigan’s largest county, Wayne County (composed of 34 communities including Detroit), has imposed bans on adult-use cannabis businesses, leaving only two adult-use retailers approved and only one operational due to state-wide supply shortages. Here is a working list of cities and towns that have fully or partially opted in, organized by county and operation type allowed.
Municipalities that have opted in are allowed to regulate or limit the number of marijuana businesses in the community. Specifically, municipalities are authorized to:
Although the roll-out of Michigan’s adult-use program is limited to existing medical facilities and residents, this means there are significant opportunities for these groups. First of all, there will be less competition and more time to establish strong brand recognition and to build a substantial customer base. Additionally, there are no capitalization requirements for adult-use licenses, fewer financial documents required, and fees are significantly lower than they were for initial medical licensure. Entrepreneurs looking to get in on the state’s recreational market can apply for an adult-use testing license (Safety Compliance Facility) without the requirement of being a Michigan resident or holding a medical license. They will, however, need to apply for a medical license to be eligible to apply for any other adult-use licenses. Each license type outlined below is required to submit a social equity plan, renew their license annually (with associated fees) and pay the $6,000 application fee.