Michigan Marijuana Microbusiness License

What Is a Marijuana Microbusiness in Michigan?

Michigan recognizes marijuana micro-business as an excellent opportunity for entrepreneurs to enter the marijuana market and operate integrated marijuana businesses within the state. The marijuana microbusiness structure in Michigan allows business owners to grow marijuana, process marijuana, and sell cannabis-infused products to adults 21 years or older without depending on other suppliers. However, a Michigan marijuana microbusiness is not permitted to sell or transfer marijuana or marijuana-infused products to other licensed recreational marijuana establishments. Also, they cannot sell their seeds to other marijuana growers. The essence is to enable a standalone marijuana business model independent of other marijuana establishments.

In Michigan, marijuana microbusiness establishments can:

• Grow up to 150 mature marijuana plants
• Process marijuana into products such as edibles and concentrates
• Package marijuana-infused products to get them ready for sale
• Sell packaged marijuana products to adults 21 years or older

Michigan also has another microbusiness license called a Class A marijuana microbusiness license. This license authorizes the holder to:

• Cultivate up to 300 mature marijuana plants
• Package and sell or transfer marijuana products to individuals aged 21 years or older
• Buy marijuana concentrate and marijuana-infused products from licensed marijuana processors
• Send marijuana and marijuana products to licensed safety compliance facilities for testing

Does Michigan License Marijuana Microbusinesses?

Yes. The Michigan Regulation and Taxation of Marijuana Act (MRTMA) requires and permits marijuana microbusinesses to be licensed in Michigan under the Michigan Department of Regulatory Affairs (LARA) and the Marijuana Regulatory Marijuana Licensees Rule 420.105. Initially, not all individuals or entities were permitted to apply for a microbusiness license in Michigan. At some point, only Michigan residents were eligible to obtain this license, but non-residents can now apply for it.

Before applying for a marijuana microbusiness license, applicants should determine whether their municipalities of interest permits establishing microbusinesses. Considering the limitation of cultivation, processing, and sales, licensed marijuana growers, processors, and secure transporter cannot operate marijuana microbusinesses.

How to Apply for a Marijuana Microbusiness License in Michigan

The Cannabis Regulatory Agency (CRA) of the Michigan Department of Licensing and Regulatory Affairs (LARA) issues marijuana microbusiness licenses to interested entrepreneurs in Michigan. The application can be done online or using paper forms. The required documentation for applying for a microbusiness license in Michigan include:

• Copy of applicants 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
• Certificate of Occupancy for the proposed location
• Lease agreement or deed of purchase

There are two steps involved in getting a marijuana microbusiness license in Michigan. The CRA allows an applicant to complete the first step before getting a suitable location for the proposed business. Anyone entrepreneur interested in getting a marijuana microbusiness license in Michigan should take the following steps:

Step 1 - Pre-Qualification Stage

Any applicant entity intending to apply for a marijuana microbusiness license must complete the Entity Prequalification Application Form and attach the required documentation. A sole proprietor must fill out the Sole Proprietor Prequalification Application Form 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 individual (an individual with an ownership interest in an applicant entity) must complete the Supplemental Individual Prequalification Form and provide required supporting documentation.

Generally, the prequalification stage of a marijuana license application in Michigan involves conducting a thorough background check on the primary applicant and supplemental applicants (individuals and businesses with an ownership interest in the primary applicant). The essence of this check is to ensure they do not have any disqualifying criminal convictions on their records. During the background check, the CRA will search the criminal histories of all the applicants on several state and federal databases. 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 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.
2. 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.
3. The applicant has intentionally applied for a license under this act that contains false information.
4. 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.
5. The applicant does not have the ability to maintain adequate premises liability and casualty insurance for its proposed marijuana business.

At the prequalification stage, the primary license 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 capability of the applicants to determine and ensure that they satisfy the minimum financial requirements for the proposed business.

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. To apply for a Michigan marijuana microbusiness license, submit the completed prequalification form with required documents to the CRA by mail to:

Department of Licencing and Regulatory Affairs

Cannabis Regulatory Agency

Licencing Division

P.O.Box 30205

Lansing, MI 48909

Phone: (517) 284-8599

Alternatively, submit completed forms and supporting documentation in person 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 marijuana microbusiness license application, applicant entities and sole proprietors that have already identified a location for their proposed marijuana facility can complete a Marijuana Establishment License Application Form. They should select "Marijuana Microbusiness" under the license type field on the form and provide all required documentation listed in the application form. As a part of the required documentation at the license qualification stage, a license applicant must prepare and submit a business plan to the CRA.

A prospective licensee must provide information on the location with details of the municipality of the proposed marijuana establishment. At this stage, the CRA 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 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 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 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 MRS approves an application at this stage and the applicant has passed the BFS and CRA inspection, they may proceed to pay the required licensing assessment fee. The CRA will issue an applicant a microbusiness license, and they can start operating legally in Michigan as a marijuana testing facility. The Department of Licensing and Regulatory Affairs) (LARA) provides guides on applying for a Michigan marijuana microbusiness license.

How Much Does a Marijuana Microbusiness License Cost in Michigan?

A Michigan marijuana microbusiness license applicant must pay a non-refundable $3,000 application fee for prequalification. Upon approval, they will pay an initial licensure fee of $8,300. Licensees have to renew their microbusiness license annually for the same amount. A Class A microbusiness license costs $18,600. Similarly, this is also the annual renewal fee for the license.

Can Marijuana Microbusiness Licensees Hold Other Cannabis Licenses in Michigan?

No. A marijuana microbusiness licensee holding other cannabis licenses in Michigan violates Section 9 of the Michigan Regulation and Taxation of Marijuana Act (MRTMA), MCL 333.27959.