Insights: Cannabis in Michigan

Lisa
June 21, 2018

Contributing writer: Alex Bibisi


Weighing in on the latest Michigan cannabis developments and opportunities.

Michigan’s State Board of Canvassers has approved a measure that will put legalization of adult-use marijuana on the 2018 ballot.

Preparing for these new opportunities requires digging below the surface level facts and understanding the nuances of application preparation. After working with clients in 27 states, we have learned to read between the lines and develop application materials that represent the vision of the business owners while also maintaining compliance with complex regulations.


What’s different about Michigan’s medical marijuana program and the proposed adult-use program?

Unlike Michigan’s medical marijuana law, which requires municipalities to opt IN to the program, the adult-use law would require municipalities to explicitly opt OUT.

Municipalities may ban all forms of adult-use businesses or may limit the number of cannabis facilities allowed to operate within their borders. If a municipality limits the number of facilities, it must select winners through a competitive application process. Municipalities may also have their own restrictive operating regulations and zoning requirements.

 

Speaking from Experience:

Obtaining a marijuana license in Michigan can be difficult.

While state licenses are issuable to any applicant who meets legal requirements, there are 70+ pages of statutes and regulations. Applicants must demonstrate compliance with these regulations — with substantive detail — in the application.

State license applications also require detailed plans for recordkeeping, inventory management, security, marketing, technology, and staffing. Applicants will need the input of industry veterans to compile a complete and competitive plan that addresses each of these critical areas of operation.

Local licenses present even more of a challenge. Because local licenses are evaluated competitively, prospective licensees may have to beat out several other applicants to win permission to operate in a desirable municipality. Additionally, local governments often have their own regulations and zoning requirements that applicants are expected to comply with in addition to state laws.

 

The Facts:

If the measure passes, it will allow adults age 21+ to possess on their person a maximum of 2.5 ounces of marijuana or up to 15 grams of concentrate. At home, that amount will increase to 10 ounces if all marijuana over 2.5 ounces is stored in a locked container. Residents will also be able to grow up to 12 plants to produce marijuana for personal use. Retail sales of adult-use marijuana will be subjected to a 10% excise tax.

The ballot initiative creates six license types: grower, processor, microbusiness, retailer, safety compliance facility, and secure transporter.

Grower licenses are further divided into three subtypes: class A (100 plants); class B (500 plants); and class C (2,000 plants). Microbusinesses will also be able to grow up to 150 plants.

State licenses are shall-issue to any qualified applicant. However, for the first two years of legalization, the Michigan Department of Licensing and Regulatory Affairs may only issue adult-use licenses to existing medical marijuana licensees.

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