Michigan Marijuana Distribution License

Does Michigan Require a License to Distribute Marijuana and Marijuana Products?

Yes, Michigan requires anyone or entity intending to venture into the marijuana distribution business in the state to obtain a license to do so. Michigan commonly refers to a marijuana distribution license as a marijuana secure transporter license. This license authorizes licensees to store and transport marijuana and money meant to purchase marijuana or those realized from marijuana sales between marijuana facilities. The Department of Licensing and Regulatory Affairs (LARA) is responsible for issuing marijuana secure licenses to interested persons or entities. In Michigan, transportation plays a critical role in ensuring that legal marijuana stays within the regulated market, hence the need to have licensed secure transporters within the state. Licensed secure transporters provide services for a fee upon request of a person with legal custody of marijuana or money associated with marijuana sales or purchase. Michigan marijuana law defines a marijuana secure transporter as a person with a marijuana secure transporter license or an agent acting on behalf of a marijuana secure transporter licensee who is at least 21 years old.

Per Section 333.27503 of the Medical Marijuana Facilities Licencing Act (MMFLA), a Michigan marijuana secure transporter license is not a license to transport marijuana to a registered primary caregiver or registered qualifying medical patent. Michigan marijuana laws mandate all marijuana businesses in the state to use the services of marijuana secure transporters in moving marijuana plants or marijuana-infused products between licensed cannabis businesses. Under the MMFLA and the Michigan Regulation and Taxation of Marijuana Act (MRTMA), a licensed marijuana secure transporter must cite their primary office in a municipality that permits the establishment of marijuana businesses within its boundaries.

Michigan prohibits licensed marijuana secure transporters or prospective licensees from having interests in marijuana growers, provisioning centers, processors, or safety compliance facilities. Specifically, anyone linked to a marijuana secure transporter in Michigan cannot engage in any other value chain of the marijuana industry within the state. Also, a secure transporter must not be a registered primary caregiver or a registered qualifying medical patient. The MMFLA and the Marijuana Tracking Act] require licensed secure transporters to enter current inventory, transactions, and other relevant information into the state statewide monitoring system. All marijuana plants and marijuana-infused products must be locked in secured and sealed containers when moving them between marijuana facilities. The sealed containers must not be accessible while in transit.

What Distribution Activities are Covered by Michigan Marijuana Distribution License?

In Michigan, a marijuana secure transporter license holder can store and move marijuana plants and marijuana-infused products to and from various marijuana retailers (dispensaries), growers (cultivators), testing facilities, and processors (manufacturers). Besides being authorized to store and transport marijuana within the state, secure transporters move money associated with marijuana sales or purchases between licensed marijuana facilities. The Marijuana Regulatory Agency (MRA) requires all marijuana establishments, including secure transporters, to store all marijuana products' inventory in a restricted access area. Although the marijuana secure transporter may have physical custody of the money or marijuana, the transferor or the transferee owns the legal custody.

According to Michigan marijuana law, a marijuana secure transporter cannot hold physical custody of marijuana or marijuana cash for more than 48 hours. During this period, they must store the money or marijuana (or marijuana-infused products) safely in the secure storage area of their state-licensed facility. Per Section 333.27503 of the Medical Marijuana Facilities Licencing Act (MMFLA), each distributing vehicle of a marijuana secure transporter must be operated by two persons, with at least one individual waiting in the motor vehicle through the entire period of the marijuana movement. A driver transporting marijuana for a licensed marijuana secure transporter must have a Michigan-issued chauffeur's license. According to Rule 6 in the Michigan Marijuana Licensees Rule, a secure transporter may travel through any municipality to transport marijuana or marijuana-infused products to a licensed marijuana facility. However, they must carry with them a copy of the route plan and manifest during the trips between marijuana facilities.

Other marijuana businesses in Michigan are required by law to use licensed secure transporters to transport marijuana and marijuana-infused products. Consequently, licensed marijuana secure transporters are at liberty to decide their service rates since they are responsible for providing approximate cost estimates to marijuana business owners. Typically, marijuana secure transporters only respond to service requests of persons with legal custody of marijuana products or cash associated with marijuana sales or purchases. In turn, other marijuana business establishments in Michigan will not engage the services of marijuana secure transporters that fail to comply with Michigan marijuana regulations.

Does Michigan Offer Transport-Only Distributor License?

No. Essentially, Michigan forbids anyone or entity holding a marijuana secure transporter license to participate in other aspects of the state's marijuana industry. Hence, a marijuana grower license holder or a marijuana processor license holder in Michigan cannot apply for or obtain a secure transporter license solely for their marijuana business. They must engage the services of persons or entities licensed exclusively for this service to move their marijuana or marijuana-infused products to other licensed marijuana establishments.

How to Get Marijuana Distribution License in Michigan

In Michigan, the Marijuana Regulatory Agency (MRA), a bureau under the Michigan Department of Licensing and Regulatory Affairs (LARA), licenses entities or persons interested in the marijuana distribution business. Any person or entity interested in applying for Michigan marijuana secure transporter licenses can use the online portal provided by LARA or use paper forms and submit via mail or in person. LARA requires various forms of documentation from an applicant to obtain a marijuana secure transporter license. They include:

  • Copy of government-issued IDs
  • Entity information documents - These include a copy of governing documents (such as bylaws and operating agreement), certificate of good standing, approval to conduct business transactions in Michigan (if applicable), and authorizing resolution). Others are a copy of the organizational structure and certificate of an assumed name (obtained from LARA Corporations Division).
  • Capitalizing documents - These include the CPA Attestation Form, Statement of Money Lender Form, and promissory note/line of credit documents
  • Regulation documents - These include a copy of marijuana licenses, a copy of any other commercial licenses or any comparable license from other jurisdiction, and a summary of facts concerning license denial, revocation, restriction, suspension, or nonrenewal
  • Litigation documents - These consist of a copy of a judgment or a copy of a complaint if applicable
  • Debt, insolvency, or bankrupt documents
  • Tax liability and delinquency documents

There are two steps involved in getting a marijuana secure transporter license in Michigan. An applicant can complete the first step before establishing the location of the proposed establishment. Generally, in Michigan, a marijuana secure transporter license applicant does not need to secure a business location before starting the application process for a license. The application process for a marijuana secure transporter license in Michigan is complex, and completing the relevant forms is a tedious task. Applicants may want to engage experienced legal practitioners who have the resources to help with the application process. Anyone or entity interested in getting a marijuana secure transporter license in Michigan should take the following steps:

Step 1 - Pre-Qualification Stage

Any applicant entity intending to apply for a medical marijuana secure transporter license in Michigan must complete the Applicant Entity Prequalification Application Form (AEPA) and provide the required supporting documentation. A sole proprietor must fill out the Sole Proprietor Prequalification Application Form (SPPA) and supply all needed documentation. Applicant entities and sole proprietors must pay a non-refundable fee (as determined by the MRA) at the prequalification application stage. Similarly, any supplemental entity (an entity that has an ownership interest in an applicant entity) must complete the Supplemental Entity Prequalification Application Form (SEPA) and provide required supporting documentation. Filling out a Supplemental Individual Prequalification Application Form (SIPA) and providing relevant supporting documentation is required of a supplemental individual (an individual with an ownership interest in an applicant entity).

For a recreational marijuana secure transporter license, the following prequalification forms must be completed by an entity, a sole proprietor, and a supplemental individual, respectively, while providing the required supporting documentation as they do so:

In Michigan, supplemental applicants differ based on their business structure. These include:

The prequalification stage of a marijuana secure transporter license in Michigan involves conducting a meticulous background check on the primary applicant and supplemental applicants (individuals and businesses with an ownership interest in the primary applicant) to ensure there are no disqualifying criminal convictions. During the background check, the MRA will search the criminal histories of all the applicants on several state and federal databases. At the prequalification stage, the primary license applicants must pay a certain non-refundable application fee as determined by the MRA. However, supplemental applicants are not required to pay any application fees.

The prequalification stage equally reviews the financial capability of the applicants to determine and ensure that they meet the minimum financial requirements for a marijuana secure transporter license. It also looks at their financial backgrounds to ensure they are in order and that applicants do not have inexplicable transactions or sources of income. The Administrative Emergency Rules controlling the marijuana licensing process in Michigan set certain minimum funding limits. Although the MRTMA is not keen on these limits, proof of financial responsibility is still essential and required. Under the MMFLA, the MRA will not issue a marijuana secure transporter license without an attestation showing that an applicant can meet up with the minimum capitalization requirement of $200,000. A minimum of 25% of this fund must be liquid to cover the initial expenses of operating the proposed marijuana establishment. The applicant must also show evidence that there is no lien on the asset named as the source of capitalization.

According to the MMFLA, any applicant found with any of the following disqualifying convictions or conditions does not qualify to get a marijuana license in Michigan:

  1. The applicant has been charged with or released from jail for a felony under Michigan laws, other state laws, or the United States laws within the past ten years. A person convicted of a controlled substance-related felony within the past ten years is also not qualified.
  2. The applicant has been charged with a misdemeanor involving a controlled substance, theft, dishonesty, or fraud in any part of the U.S. or been found responsible for violating a local ordinance in any state involving a controlled substance that substantially corresponds to a misdemeanor in that state within the past five years.
  3. The applicant has knowingly applied for a license under this Act and provided the MRA with wrong particulars.
  4. The license applicant cannot demonstrate the ability to maintain adequate premises liability and casualty insurance for its proposed marijuana business.
  5. The license applicant holds an elective office of a governmental unit in Michigan, another state in the U.S, or the federal government. A member of or employee of a regulatory body of a governmental unit in Michigan, another state, or the federal government is also not eligible. Likewise, an employee of a governmental unit in Michigan cannot apply for a marijuana license. This condition does not apply to an individual who holds an elected office or an elected precinct delegate or an employee of a federally recognized Indian tribe.

After completing the applicable prequalifications forms, applicants may submit them and all required documentation either by mail, in person, or online through the LARA's application portal. First-time users of the online application portal must register before they can proceed with their applications. Marijuana secure transporter license applicants in Michigan can forward their completed prequalification forms and supporting documentation to the MRA via mail to:

Department of Licencing and Regulatory Affairs

Marijuana Regulatory Agency

Licencing Division

P.O.Box 30205

Lansing, MI 48909

Phone: (517) 284-8599

They can also submit completed forms and supporting documentation in person at:

Department of Licencing and Regulatory Affairs

Marijuana Regulatory Agency

Licencing Division

2407 N. Grand River Avenue

Lasing, MI 48906

Step 2 - License Qualification Stage

At the qualification stage of a medical marijuana secure transporter license, applicant entities and sole proprietors that have already identified a location for their proposed marijuana facility can complete a Medical Marijuana Facility License Application Form. They should select _secure transporter _as the license type of interest on the form and provide all required documentation listed in the application form. The prospective licensee must provide proof of commercial general liability insurance covering the premises liability not later than 60 days after a secure transporter license is issued. At the qualification stage of a recreational marijuana secure transporter license application, an applicant must complete the Marijuana Establishment License Application Form and provide the required documents listed on the license application form.

As a part of the required documentation at the license qualification stage, a license applicant must write and submit a business plan to the MRA. The business plan must be very detailed and should cover every factor that is required to meet standards. An ideal business plan for a proposed marijuana establishment must include information like staffing, security, facility content, financial projections, required technology, and the plans for disposal of waste.

A prospective licensee must provide information on the location with details of the municipality of the proposed marijuana establishment. At this stage, the MRA vets the proposed facility and reviews the business specifications, municipality information, general employee information, and proof of financial capability. A physical marijuana establishment must pass an inspection by the MRA within 60 days of submitting a complete qualification application. The MRA may deny a marijuana secure transporter license application if a prospective licensee fails to pass the inspection within 60 days of the license qualification application submission. Applicants must ensure that the proposed property for the marijuana establishment is qualified for a marijuana facility under the chosen municipality ordinances and zoning regulations.

Also, prospective licensees must pass a Bureau of Fire Services (BFS) inspection within 60 days of submitting their license qualification applications to the MRA. As with the MRA vetting, failure to pass a BFS inspection under 60 days of qualification application submission may prompt the MRA to deny an application. Once the MRS approves an application at this stage and the applicant has passed the BFS and MRA inspection, they may proceed to pay the required licensing assessment fee. The MRA will issue an applicant an MMFLA or MRTMA marijuana secure transporter license, and they can start operating legally in Michigan as a marijuana distributor. The Michigan Department of Licensing and Regulatory Affairs (LARA) provides the Marijuana Secure Transporter Application Instructions to guide marijuana license.

How Much Does Marijuana Distribution License Cost In Michigan?

A person or an entity seeking to obtain a marijuana secure transporter license in Michigan must pay a non-refundable application fee of $6,000 (must be paid before an application will be processed). This fee applies to marijuana secure transporter licenses obtained under the Medical Marijuana Facilities Licensing Act (MMFLA) and the Michigan Regulation and Taxation of Marijuana Act (MRTMA). The application fee offsets the cost for the Michigan Department of Licensing and Regulatory Affairs (LARA), the Michigan State Police (MSP), and the costs for services for conducting background checks on persons applying for marijuana licenses.

The cost of initial licensure under the MRTMA is $25,000, while it is $13,125 under the MMFLA. The MRTMA and the MMFLA also require marijuana license applicants in Michigan to pay a specific regulatory assessment fee. The MRA determines the amount annually and collects it from license applicants during new license applications or renewals. The assessment fees offset operational costs, the cost of medical marijuana-related services rendered by the Michigan Attorney General's Office, the Department of Treasury, and the MSP. It also offset other statutory mandates. By law, the assessment must provide $500,000 yearly to LARA for licensing substance abuse disorder programs in the state.

The license renewal fees for marijuana secure transporter license holders are determined based on the net weight of marijuana they transport during the review period. Under the MRTMA, marijuana secure transporter license holders in the top tier pay $30,000 for license renewals. The renewal cost for those in the middle tier is $25,000, while the bottom-tier players pay $20,000. In Michigan, the license renewal costs for medical marijuana secure transporter license holders are $17,500, $13,125, and $8,750 for players in the top tier, middle tier, and bottom tier, respectively. The Marijuana Regulatory Agency (MRA) determines whether a licensee is a top, middle, or top player in a fiscal year compared to other licenses under the secure transporter license type.

Typically, a marijuana license is issued for one year in Michigan and must be renewed annually. If a license holder does not submit a renewal application by the license expiration date, they may apply for renewal within 60 days after its expiration upon application. A license applicant may need to pay additional costs during their application. Section 333.27402(11) of the MMFLA authorizes late renewal fees. Also, Section 333.27401(5) of the Act approves the actual cost of applicants' background investigation and processing that exceed the standard application fee paid by an applicant as additional costs. All payments for marijuana processor license-related costs in Michigan must be made payable to the State of Michigan. The MRA accepts payment of these fees by cash, check (cashier's check or e-check), money order, and debit card or credit card (Discover, MasterCard, Visa).

Can Licensed Marijuana Distributors Also Get Other Cannabis Licenses in Michigan?

No. Section 333.27503(32) of the Medical Marijuana Facilities Licensing Act (MMFLA) stipulates that a marijuana secure transporter license holder or their investors must not have an interest in a marijuana grower, provisioning center, processor, or safety compliance facility. Consequently, it is safe to conclude that a licensed marijuana distributor in Michigan cannot get other cannabis licenses within the state.

Michigan Marijuana Distribution License