April 30, 2020 8 min read

By George Mouratidis

With the passage of Proposal 18-1 in 2018, Michigan became the first state in the Midwest to decriminalize recreational marijuana use.

Although Illinois recently joined the “Midwest MJ club,” Michigan still has phenomenal potential in this budding industry.

Interestingly, statistics suggest at least 12 percent of Michigan’s residents already smoke pot regularly. What better way to capitalize on this growing market than by opening a legal cannabis dispensary?

OK, we won’t lie: applying for a marijuana dispensary license can be confusing at times.

Like every other state, Michigan has unique laws regarding the legal sale and use of recreational cannabis. To make matters even more complicated, various districts have different regulations Michigan dispensaries must follow.

In this post, we’ll try our best to simplify the essential features of Michigan’s marijuana dispensary program.

You’ll also find dozens of links to government-approved websites sure to help you stay up-to-date on Michigan’s marijuana laws. Armed with the info in this piece, you should feel confident starting your dispensary application process.

Don’t Know Where To Begin? Look To LARA!

First and foremost, you need to get familiar with Michigan’s Department of Licensing and Regulatory Affairs (LARA). All of your application paperwork will be filed through LARA’s Marijuana Regulatory Agency (MRA), so you should feel comfortable navigating this organization’s website.

If you haven’t already, we suggest visiting Michigan’s MRA home page and adding it to your Favorites. You’ll find easy access to online applications and renewals for dispensary licenses on this page.

By the way, if you don’t already have an online profile with LARA, then you could register a new account by visiting this portal.

Michigan’s Two-Part Process: Pre-Qualification & License Qualification

Now that you know who you have to work with let’s go over what you should expect during the application process.

There are two parts to a marijuana facility license application: pre-qualification and license qualification. During pre-qualification, LARA will ask for background information like criminal records and tax history to see if you’re a viable candidate. The license qualification, however, will focus on your proposed business.

Note: you don’t have to submit both of these qualifications at the same time. LARA designed this program to help applicants who are still searching for a suitable business area.

Even if you haven’t secured a location for your dispensary, you can legally send through all of your pre-qualification documents. In the license qualification stage, however, you must have your dispensary’s location settled.

Let’s take a closer look at the documents you’ll have to submit at different application stages.

The Pre-Qualification Background Check

Basically, the pre-qualification stage is a lengthy background check. LARA wants info on your financial, taxation, and criminal background to determine whether you’d be a good candidate for a marijuana facility license.

Everyone who goes through pre-qualification must supply LARA with fingerprints for a full review. Other documents that LARA might ask for include:

  • W2 forms
  • Any previous or current regulatory licenses
  • Company bylaws
  • Statements from relevant financial institutions

Please keep in mind that anyone who has a stake in your marijuana dispensary must submit documents in the pre-qualification stage. You must give LARA the names and contact details of any people or businesses invested in your dispensary venture.

For more details on this stage of the application process, LARA strongly recommends reading section 404 of the Medical Marihuana Facilities Licensing Act.

License Qualification: Details On Your Dispensary

After you’ve submitted all of those pre-qualification documents, it’s time to move on to the license qualification section. This second part of the application process is most concerned with your dispensary’s business operations and location.

Before going any further, it’s worth repeating that you must secure a location for your dispensary before filling out the license qualification. Also, you must have approval from your chosen municipality to operate in that region.

Although the state government approved recreational marijuana in 2018, not every city allows dispensaries at this time. Get in touch with your municipal authorities and figure out the area’s current policy.

If your zone allows dispensaries to operate, then you need to get a formal attestation signed by a local clerk and include it in your documentation. 

In addition to the municipal attestation, here are a few other documents required in a license qualification.

  • A detailed floor plan for your proposed dispensary.
  • Insurance forms for your facility.
  • The technology you’ll use to keep track of inventory, lab results, and sales.
  • Security system details.
  • Staffing information. 

If you want more information on both of these application phases, then you might want to check out this 2017 LARA Advisory Bulletin.

Although this document focuses on medical marijuana facilities, it has useful info for those interested in recreational dispensaries.

Show Me The Money: Taxes & Fees

By now, you’re probably wondering how much this application process will cost you.

Well, at the very least, you will need to pay a $6,000 pre-qualification fee. Regarding licensing fees, these could range from between $10,000 – $66,000 per year, depending on your business.

As far as taxes go, Michigan currently charges a six percent sales tax and a ten percent excise tax on recreational marijuana. Medical marijuana, on the other hand, is only subject to six percent sales tax.

For those interested in reading more about Michigan’s marijuana taxation policy, be sure to browse this document put together by the state’s Department of Treasury.

Where Can You Build A Dispensary In Michigan?

One of the trickiest parts of establishing a marijuana dispensary in Michigan is finding the right location.

On top of considering the competition in your region, you have to avoid drug-free zones and municipalities that have opted out of the recreational marijuana market.

In this section, we’ll detail Michigan’s dispensary zoning restrictions to help you find the perfect spot for your business.

Where You Need To Avoid Opening A Dispensary

No matter what municipality you choose to open a dispensary in, there are a few areas you can never set up shop.

Most importantly, you cannot open a dispensary that’s within 1,000 feet of a school or daycare facility. Marijuana dispensaries should also be at least 1,000 feet away from liquor vendors and other recreational dispensaries.

In most cases, Michigan doesn’t allow dispensaries to operate in residential areas, but this could vary by municipality.

Always check with local authorities to figure out more specific zoning regulations. 

What’s Michigan’s Opt-Out Program?

Speaking of local laws, every community in Michigan has the right to opt-out of the state’s marijuana dispensary program. Indeed, shortly after Proposal 18-1 passed, dozens of districts banned dispensaries in their territories.

In most cases, however, local lawmakers only put these restrictions in place as a temporary measure. Some municipal authorities want more precise guidelines from the state, while others want to put together zoning laws that work best for their constituents.

The only way to figure out your county’s legal status is to get in touch with municipal leaders. You could also check out this spreadsheet on LARA’s website for data on where each district stands. Although LARA continuously updates this document, please be sure to check the latest revision date.

FYI: you can also see all of the legal dispensaries in Michigan by using this interactive map.

Michigan’s Social Equity Program: Helping Those In Need

When researching different areas to set up a dispensary in Michigan, you’ll probably run across the state’s Social Equity Program. Set up by the MRA, the Social Equity Program helps communities adversely impacted by Michigan’s previous prohibition laws.

According to the MRA, all of the districts included in the Social Equity Program had significantly higher rates of marijuana-related convictions in the past. Anyone who lives in or wants to open a dispensary in these districts could receive financial assistance from the state.

Currently, there are over 40 zones that meet Michigan’s standards for the Social Equity Program. You can find a map of these communities on this website

In addition to offering fee reductions for applicants, the MRA frequently sponsors educational seminars to help people in target zones apply for this program. You could also find numerous online resources related to the Social Equity Program on this LARA link.

Anyone interested in learning more about the Social Equity Program should visit this LARA webpage.

Be Sure You Know Michigan’s Customer Limits

As a dispensary owner, you must be familiar with the caps Michigan placed on daily weed sales.

You should also put together a comprehensive training course to ensure all of your employees know these state-mandated amounts. Disobeying Michigan’s legal marijuana limits could result in hefty fines and even jail time.

Most importantly, you need to verify that all of your customers are 21-years-old. Also, everyone working at your dispensary should be at least 21. 

Another useful number to memorize is 2.5 ounces. Under Michigan’s current marijuana laws, customers can only purchase 2.5 ounces (or about 70 grams) of marijuana buds per day. Users can, however, legally store up to 10 ounces at their home. 

If you’re selling concentrates, then you can only sell seven grams to one customer in one day. This category includes popular vape extract cartridges and e-liquids.

Dispensary owners who are selling marijuana edibles should know they can only sell 16 ounces of solid goods to each customer each day. For liquid marijuana infusions, however, you can sell up to 36 ounces per day.

Please note that there are no restrictions currently placed on THC percentages in marijuana products. Although you must put accurate cannabinoid counts on your products, Michigan does not place different daily limits on goods with higher-than-average THC counts.

Be sure to invest in a high-quality software to help track how much each of your customers buys every day.

Can People Smoke In My Dispensary?

If you want to create a smoker-friendly area for customers, then you have to mention this in your license application. Although they are rare nowadays, the state does offer consumption establishment licenses that allow dispensary owners to let legal age customers smoke in a designated room.

Anyone who is applying for this exclusive license must point out their smoking room in their dispensary’s floor plan. Remember, Michigan only allows marijuana consumption in private, so this area needs to be far from public view.

Regardless of whether you want a smoking zone or not, you cannot sell any alcohol, tobacco, or food products in your dispensary.

A Side Note On Michigan’s Spelling & Semantics

As you’re filling out your paperwork for your dispensary, you will notice the term “provisioning center” all over the place. Even more curious, the word “marijuana” is listed as “marihuana” in legal texts.

Interestingly, Michigan lawmakers have to use these outdated terms unless Congress decides to change them. The most important thing for you to know is that “provisioning center” refers to “cannabis dispensary.” 

Michigan’s Marijuana Laws – A Few Quick References

If you don’t mind reading long legal texts, then you’ll find a ton of information in Michigan’s Medical Marihuana Facilities Licensing Act, 2016 PA 281. As you’d expect from its title, this law details proper licensing and taxation procedures for legal marijuana dispensaries. Even if you don’t read the entire piece, it’s worth putting this official webpage in your Favorites for quick reference.

For those who are interested in reading the full text of Michigan’s Proposal 18-1, you can find a link on this website. You could also see the MRA’s formal list of “Adult-Use Marihuana Establishments Emergency Rules” on this website

Good Luck With Your Michigan Dispensary Application

Please don’t feel intimidated by all of the complex regulations governing cannabis dispensaries in Michigan. Yes, there are loads of laws to consider, but there are also plenty of resources that can help you through the application process. We encourage you to look at LARA’s FAQ page and click on any questions you have. If you have a few queries that aren’t on this page, then you could always contact the MRA directly using this helpful “Contact Us” link.

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