Michigan Marijuana Manufacturing License

Does Michigan Require a Marijuana Manufacturing License to Make Cannabis Products?

Yes. Michigan requires a person or entity to obtain a state license to manufacture cannabis products. This license is known as the marijuana processor license in Michigan. Typically, a marijuana processor takes marijuana plant material and turns it into a cannabis-infused product. Marijuana-infused products are legal in Michigan, and as such, processing them is also permitted. However, a legal processing activity within the state must obtain the requisite license. In Michigan, anyone or entity looking to produce cannabis-infused products such as edibles, topicals, distillates, and vape cartridges must secure a marijuana processor license. Other cannabis-infused products produced by processors include capsules, suppositories, THC distillates, and concentrates (such as wax, dabs, and shatter).

In Michigan, a marijuana processor license authorizes the licensee to sell marijuana-infused products to licensed provisioning centers (retailers) and other licensed processors. However, the growers and the processors that the licensee buys from or sells to must be situated within the same facility as the licensee. Processors would need to engage the services of a secure transporter if selling to or buying from other processors or growers not in the same facility as them. Under the Medical Marijuana Facilities Licencing Act (MMFLA), a marijuana processor is a commercial entity that has obtained a license to purchase marijuana from licensed growers. While many types of cannabis compounds can be processed, the most common of them are those derived from cannabidiol (CBD) and tetrahydrocannabinol (THC). In Michigan, licensed marijuana processors under the MMFLA have no limits on the amounts of cannabis-infused products they can process in one facility.

The production of marijuana-infused products for sale in licensed medical marijuana provisioning centers requires a medical marijuana processor license. Similarly, a recreational marijuana processor license holder can only produce marijuana-infused products for sale at recreational marijuana provisioning centers. It, therefore, implies that a marijuana processor license can be issued under the Michigan Regulation and Taxation of Marijuana Act (MRTMA) and the Medical Marijuana Facilities Licencing Act (MMFLA). A processing center must hold a medical processor license or a recreational processor license, or both. Anyone holding a marijuana processor license in Michigan cannot be a registered caregiver and must not employ a registered caregiver. A new processor license holder who is also a caregiver must relinquish their caregiver status within five business days of securing the license to enable them to operate a marijuana processor. The same applies to a new employee of a licensed marijuana processor facility. They must forfeit their caregiver status within five days from their date of employment.

Does Michigan Require Licensed Cannabis Manufacturers to Have Cultivation Licenses?

Licensed marijuana processors in Michigan can also hold a grower license, but this is not mandatory. According to Rule 4 of the Marijuana Operations Rule Set (R 420.204), Michigan permits operation at the same location for a licensee with a combination of marijuana licenses in what is known as co-location. It then implies that a person can apply for and obtain a marijuana license to operate as a grower and a processor. However, there will be separate applications, marijuana licenses, and regulatory assessments for marijuana processing and growing.

To be able to co-locate, a person with a marijuana processor license and marijuana grower license must satisfy the following:

• Each licensed entity remains different and separate within different working spaces of the marijuana establishment.
• Each licensed entity has different entrances and exits, point of sale operations (if applicable), and record-keeping systems.
• The municipality where the facility is situated does not prohibit co-location of facilities through its local ordinance or zoning laws.
• Each licensed entity complies with local and state public health standards, fire safety, and building inspection rules.
• Each entity post its license on the wall in its separate working area
• The Department of Licensing and Regulatory Affairs (LARA) has authorized the licensee to grow and process marijuana at the same location.

Per the Medical Marijuana Facilities Licensing Act, a licensed marijuana processor can purchase marijuana only from a licensed grower and sell marijuana-infused products to a licensed provisioning center or another processor. Invariably, a licensed marijuana processor can obtain marijuana products from other licensed processors.

How Does Michigan Classify Marijuana Manufacturing Licenses?

The marijuana processor license in Michigan is unlike the Michigan marijuana grower license that has various classes. The state's marijuana processor license is just one, regardless of whether the licensee processes marijuana-infused products for the medical market or recreational market.

What are the Different Types of Cannabis Manufacturing Licenses in Michigan?

Michigan has two categories of marijuana processor licenses. These are the medical marijuana processor license and the adult-use marijuana processor license. Marijuana law in the state requires a processing facility to hold one or both of these licenses to sell marijuana-infused products in the state legally. A facility with a medical marijuana processor license can only process and sell medical marijuana-infused products. Likewise, a recreational marijuana processor license holder can only process and sell marijuana products for the recreational market. An entity with both licenses can process and sell to both medical and recreational marijuana users.

In Michigan, the Cannabis Regulatory Agency (CRA) sets certain potency limits (THC levels) and serving size limits for cannabis-infused products processed by marijuana processors depending on the market their licenses intend to serve. These limits are a differentiating factor between a medical marijuana processor and a recreational marijuana processor in the state.

For medical marijuana-infused products, the potency limits are:

• Gummies and baked goods: 50 mg per dose, 200 mg per container
• Topical products: No limit dose and per container
• Suppositories and tampons: 100 mg per dose, 2,000 mg per container
• Capsules and tinctures: 100 mg per dose, 2,000 mg per container
• Transdermal patches: 100 mg per dose, 2,000 mg per container
• Products not listed: 10 mg per dose, 100 mg per container

For recreational marijuana-infused products, the potency limits are:

• Gummies and baked goods: 10 mg per dose, 100 mg per container
• Capsules, tinctures: 10 mg per dose, 200 mg per container
• Topical products: No limit dose and per container
• Products not listed: 10 mg per dose, 100 mg per container

Does Michigan Require a Separate License to Manufacture Edibles?

No. A marijuana processor license holder in Michigan, among other marijuana-infused products, can process edibles without a separate license. However, Rule 33 of the Cannabis Regulatory Agency (CRA) specifies requirements and restrictions on marijuana edible products for processor license holders intending to manufacture edibles. These include:

• The proper packaging and labeling of products before sale or transfer to include:
  • The name of the product
  • The name and location address of the marijuana facility that processes or packages the marijuana product
  • The net weight of the edible product
  • The constituents of the product in descending order of predominance weight
  • Nutritional claim (if made) as specified by federal labeling requirements and the CRA rules
  • Allergen labeling in a manner specified by federal labeling requirements
• Listing and recording the THC level of products in the statewide monitoring system
• Storing marijuana-infused products, including edibles as prescribed under the CRA rules

As recommended by the CRA, licensed marijuana processors must comply with the following as they process marijuana edibles:

• Edibles must not be associated with toys or cartons that would be attractive to minors.
• Edibles must not be packaged in a way that would appeal to minors
• Packaging of edibles must be in child-resistant materials
• Edibles must be processed for human consumption other than smoke inhalation

How to Get a Cannabis Manufacturing License in Michigan

Any person or entity interested in applying for Michigan marijuana processor licenses can do so online or using paper forms. The following are some of the documentation required to apply for a marijuana processor license in Michigan:

• 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 primary steps to getting a marijuana processor license in Michigan. An applicant can complete the first step before establishing the location of the proposed facility. Essentially, an applicant does not need to secure a business location before starting the application process for a marijuana processor license in Michigan. Crucial to state is that the application process for a processor license is complex, and completing the relevant forms is a tedious task. Applicants may want to engage experienced attorneys who have the resources to help with the application process. Interested persons or entities can take the following steps in applying for a Michigan marijuana processor license:

Step 1 - Pre-Qualification Stage

Any applicant entity intending to apply for a medical marijuana processor 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 CRA) 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 that has an ownership interest in an applicant entity).

For a recreational marijuana processor license, the following prequalification forms must be filled out by an entity, a sole proprietor, and a supplemental individual, respectively, while also providing the required supporting documentation:

• Entity Prequalification Application Form
• Sole Proprietor Prequalification Application Form
• Supplemental Individual Prequalification Form

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

• Limited Liability Companies
• Publicly or Privately Held Corporations
• Sole Proprietorships
• Partnerships and Limited Liability Partnerships
• Limited Partnerships and Limited Liability Limited Partnerships
• Multilevel Ownership Enterprises
• Nonprofit Corporations​
• Trusts

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

The prequalification stage equally reviews the financial competence of the applicants to determine and ensure that they meet up with the minimum financial requirements for a marijuana processor 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 crucial and required. Under the MMFLA, the CRA will not issue a processor license without an attestation showing that an applicant can meet up with the minimum capitalization requirement of $300,000. At least 25% of this fund must be liquid to cover the initial expenses of operating the proposed marijuana processing facility. The applicant must also provide a document to prove 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 cannot demonstrate the ability to maintain adequate premises liability and casualty insurance for its proposed marijuana business.
2. The applicant has been charged with or released from prison 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.
3. 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.
4. The applicant has deliberately applied for a license under this Act that contains invalid data.
5. The applicant is an elected officer of a governmental unit in Michigan, another state, 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.

After completing the relevant prequalifications forms, applicants should submit them and all required documentation either by mail, in person, or online via the LARA's application portal. First-time users of the online application portal are required to register. Marijuana processor license applicants in Michigan can forward their completed prequalification forms and supporting documentation to the CRA via mail to:

Department of Licencing and Regulatory Affairs

Cannabis Regulatory Agency

Licencing Division

P.O.Box 30205

Lansing, MI 48909

Phone: (517) 284-8599

For in-person submissions, they can do so at:

Department of Licencing and Regulatory Affairs

Cannabis Regulatory Agency

Licencing Division

2407 N. Grand River Avenue

Lasing, MI 48906

Step 2 - License Qualification Stage

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

Applicants will also be required to prepare and submit a business plan as a part of the required documentation at this stage. 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 processor license must include, at the least, staffing, security, facility content, financial plans, required technology, and the plans for disposal of waste.

A prospective licensee must provide information on the location with details regarding the municipality of the proposed processing facility. At this stage, the CRA vets the proposed facility and reviews the business specifications, municipality information, general employee information, and proof of financial responsibility. A physical marijuana processing facility must pass an inspection by the CRA within 60 days of submitting a complete qualification application. The CRA may deny a license application if a prospective licensee fails to pass the agency's 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's 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 CRA. As with the CRA vetting, failure to pass a BFS inspection under 60 days of qualification application submission may prompt the CRA to deny an application. Once the application at this stage is approved, and the applicant has passed the BFS and CRA inspection, they can go ahead and pay the required licensing assessment fee. The CRA will issue an applicant an MMFLA or MRTMA marijuana license, and they can start operating legally in Michigan as a marijuana processor.

The Michigan Department of Licensing and Regulatory Affairs (LARA) provides the general public with the paper application instruction booklets for Medical Marijuana Facility Licensing and Adult-Use Establishment Licensing.

How Much Does a Cannabis Manufacturing License Cost in Michigan?

In Michigan, to obtain a medical marijuana processor license or a recreational marijuana processor license, an applicant is required to pay a non-refundable state-level application fee of $3,000. The Cannabis Regulatory Agency (CRA) will not process an application unless this fee is paid. Also, the Medical Marijuana Facilities Licensing Act (MMFLA) and the Michigan Regulation and Taxation of Marijuana Act (MRTMA) require applicants to pay a regulatory assessment fee. This fee is due before the issuance or renewal of a license by the CRA. It is determined every year as required by Section 603 of the MMFLA.

Under the MMFLA, the cost of obtaining an adult-use marijuana processor license in Michigan is $24,000. The annual renewal fee for this license is also $24,000. To obtain a marijuana processor license under the MRTMA, a prospective licensee will pay a licensure fee of $4,500 according to the Michigan medical marijuana license fee schedule for the 2024 fiscal year. The annual renewal fee is also $4,500.