Share on facebook
Share on google
Share on twitter
Share on linkedin

Marijuana was recently legalized in Michigan, and we are still about 12 months from having any recreational marijuana facilities in the state. By legalizing marijuana for recreational use, Michigan joins 10 other states and the District of Columbia as the only recreational states within the U.S.

The cannabis industry has been growing at a rapid pace since legalization began. First with medicinal legalization and now with recreational, the cannabis market seems poised for even more growth in the coming years. Michigan is expected to be one of the largest marijuana business markets in the country. Some experts even believe it will be second only to California. The potential in the marijuana industry has attracted a lot of new faces to the industry, you may be one of them. The purpose of this article is to give newcomers a brief introduction into the industry by letting them know what steps they need to take to get a cannabis business started in Michigan.  Before we jump into the steps please review these facts about the cannabis industry in Michigan.

  • Marijuana business opportunities have plenty of options from producers, processors, provisioning centers, testers, and secure transporters.
  • Michigan regulations contain stipulations that require potential applicants for a recreational license to first hold medical cannabis licenses..
  • Michigan will have new licenses like the microbusiness licenses available for application when the recreational law is written.
  • Michigan also will allow for home grows for personal use.
  • Michigan has allowed cities to opt-out or in to legalization on a city by city basis.  

Here is 5 step guide about initiating cannabis business.


Step 1: Register business in Michigan

In order to initiate your cannabis business in Michigan, you must register an entity with the Department of Licensing And Regulatory Affairs (LARA). As with many other licensed businesses you should complete any application for a marijuana license in the entities name. After you have established your business with LARA you can begin the application process for any of the below licenses with the state:

  • Cannabis retailers
  • Cannabis wholesalers
  • Cannabis processors
  • Cannabis producers
  • Medical cannabis dispensaries
  • Medical processors.

You will also need the following licenses and permits to run your marijuana business :

Make sure you renew your registration every year before the present registration expires..

Step 2: Get your local cannabis permits and licenses.

Filling the sufficient documents with the state is not enough. In order to operate your business in a municipality, which will require municipal approval. Municipal approval also entails a seperate application process. Different licenses have different different requirements and it is important that you contact a professional to assist you with your application.

Step 3: Obtain Required Cannabis State License

Steps two and three are interchangeable and you can pursue state licensing before city or vice versa. The state license in Michigan will be required, and some cities require proof of a state application before they will even review your city application. A state license is required for any type of cannabis business to operate in Michigan.

Step 4: Determine your Tax Obligation

There are various taxes involved for Cannabis business. When organizing a business invest time by researching upcoming tax responsibilities. Michigan like other states requires that cannabis businesses pay an excise tax. This tax is something you have to disclose when applying for your IRS Employer Identification Number. Additionally, taxes will be levied differently depending on what type of business you operate. An example of this is provisioning centers are taxed differently than cannabis growers are, as such you should consult a qualified accountant to assist you in determining your tax liability.

Step 5: Anticipate Ongoing Business Registration Requirements.

The list of licensing, registration and compliance does not end here. On top of entity registration and renewals, every state and city issued cannabis license will require a yearly renewal for a set fee. You need to make sure you are prepared for these fees and understand when you need to file your paperwork. Reminders by the state and city will be sent, however we still recommend that you enlist the services of a professional when dealing with such matters.

In Sum

It is important to understand that these five steps are not all the considerations you need to take into account when starting your cannabis business, and is intended as a brief introduction into the bare minimum required when starting a new cannabis business. We highly recommend that you consult with a professional who can let you know if it is worth your time, energy, and money to get into the cannabis industry. You should understand that the journey from the beginning of the process to an up and running marijuana facility will be long and intrusive. You should be ready to lay your history out like an open book and have it examined thoroughly before you can proceed to licensure which will be the first step to starting a cannabis business in Michigan.

Share on facebook
Share on twitter
Share on reddit
Share on linkedin
Real Estate Expert

Real Estate Expert

Related Blog Article

Get Early Notification On New Property Listings