Is Michigan Rolling Out Recreational Licenses?

In recent news, Michigan is rolling out licenses for recreational cannabis businesses. Michigan’s licensing office, the Marijuana Regulatory Agency, has been accepting applications since November 1. If the agency accelerates the approval process, the ability to grow cannabis and the process to bring it to the shelf would take at least a few months. David Harns of the Marijuana Regulatory Agency expects sales to start by the end of March 2020.

Requirements for the Application

The agency expects to approve the first few permits for current medical marijuana players that already grow, sell, test, and transport medical cannabis products. However, these existing companies can use their resources to supply the recreational cannabis market more quickly than the newer companies.

Notably, only current medical cannabis operators can apply for some of the larger licenses. These include Class B and C growers, secure transporters, processors, and retailers. However, this condition will be applicable only until December 2020.

The cost of applying a license is $6,000, exclusive of license fees. The application fee is a one-time payment. This fee is nonrefundable, regardless of whether the license is issued or not. Once the application is approved, the license fee would be levied by the agency. The fee ranges from $1,000 to $40,000. Apart from this, applicants must also have an insurance policy for liability and bodily injury. The insurance coverage for this policy should at least be $100,000.

Some types of licenses

  • Microbusiness – This permit allows the business to grow, process, and sell cannabis from up to 150 plants. This license costs $8,000.
  • Class A grower – This license costs $4,000. This allows the business to grow up to 100 trees.
  • Class B grower – This license costs $8,000. This allows the business to grow up to 500 trees.
  • Class C grower – This allows the business to grow up to 2,000 trees. This license costs $40,000.
  • Processor – Procures cannabis from growers, processes, and sells in retail operations. This license costs $40,000.
  • Retailer – Operates stores. This license costs $25,000.
  • Secure Transporter- Transports cannabis between other players such as growers, retailers, and processors. This license costs $25,000.
  • Safety Compliance Facility – Examine the products and quality. This permit costs $25,000.
  • Event Organizer – Organizes events related to cannabis. This license costs $1,000.
  • Consumption business – Operates a business that allows the consumption of marijuana. This license costs $1,000.

The application process

The agency uses 15 analysts to check the applications, and each business receives five days to resolve any issues with the form. If the issues are not corrected, the application will be rejected without any refunds. The agency started accepting applications at midnight on November 1, 2019. Plus, hand-delivered applications were accepted at 8 AM that day.

The agency expects to roll out its first license this month, and the current medical cannabis players’ applications would receive the initial approvals. However, other applications require background checks, which could take 60–90 days to process.

According to the current regulations, medical cannabis growers can transfer their plants to recreational cannabis production. Notably, this transfer is allowed only if the application is approved. However, the transfer of work in progress or finished products is not allowed. The Michigan Regulatory Agency received 52 applications on the first day.

For a detailed look at the cannabis industry’s major players, please read our company overviews, including Aurora Cannabis (ACB): Company Overview, Cronos Group (CRON): The Company that Won’t Stop Growing, and Tilray (TLRY): An Overview of the Colossal Cannabis Player.