How to Open a Marijuana Dispensary in Michigan

By FindLaw Staff | Legally reviewed by Amber Sheppard, Esq. | Last reviewed September 29, 2023

Starting a marijuana dispensary in Michigan requires knowledge of compliance issues and regulations. In 2018, Michigan voted to legalize adult-use recreational cannabis. In December 2019, dispensary cannabis sales began.

Michigan's cannabis laws will likely change as Michigan's cannabis industry grows. Small business owners and entrepreneurs should know the current laws before drafting a cannabis business plan.

Note: The state of Michigan uses a different spelling to describe cannabis. Michigan laws and regulations may use the term “marihuana" instead of the more common word “marijuana." This spelling comes from the spelling in the federal Controlled Substance Act, which used the spelling from the Marihuana Tax Act of 1937. It is an outdated spelling but cannot be changed without an act of Congress. Michigan law also refers to dispensaries as “provisioning centers."

What To Expect During the Application Process

First, there is a prequalification phase. Everyone involved in the marijuana industry will have a background check during this phase. You will enter the license qualification phase once your application passes through the prequalification phase.

The cannabis license qualification phase requires more specific information. The following sections give an overview of the specific elements to consider before opening a recreational or medical marijuana dispensary.

Michigan Marijuana Facility Licenses

A Michigan dispensary can sell both recreational and medicinal marijuana. You can apply for a Medical Marihuana Facilities License through the Cannabis Regulatory Agency (CRA). CRA is a part of Michigan's Department of Licensing and Regulatory Affairs (LARA). This license covers cannabis industry jobs ranging from growers and processors to medical marijuana facilities, microbusinesses, and dispensaries.

Consider Your Location Before Starting Your Dispensary

The first thing to consider before opening a Michigan dispensary is the location. You need to find the right building or lot to build on and get permission and licenses from your municipality. Your facility must be at least 1,000 feet away from liquor stores, other dispensaries, and drug-free zones such as schools or daycares. Check the locations of existing Michigan cannabis dispensaries and businesses to narrow down acceptable locations.

In 2019, the Marijuana Regulatory Agency (MRA) started a Social Equity Program to promote adult use of marijuana from local dispensaries. This unique initiative aims to support communities previously affected by cannabis laws pre-legalization. As a result, these program locations have reduced dispensary license fees and renewal fees.

Business Models for Your Dispensary

The cannabis company model you choose and the people you partner with can all impact your license approval. Every person involved in your cannabis company will have to submit to a background check throughout the process.

There are many unique elements to consider before opening your cannabis business. During the licensing process, you must submit a site plan. The plan covers everything from the building layout to security and trash management. You will also need to lobby and advocate for your license approval throughout the licensing process.

Staying Compliant at Your Michigan Dispensary

The minimum age for recreational marijuana use is 21 years old. Medical marijuana license holders can apply for a recreational license when they are 21 years old. Ensuring that buyers are 21 years of age or older is essential during all cannabis product sales. If your dispensary sells cannabis to someone underage, you could lose your license and face legal consequences.

The table below reviews the Michigan laws and regulations that your marijuana business must follow:

Michigan Marijuana Laws	Michigan Regulation and Taxation of Marihuana Act (MRTMA) Michigan's Marihuana Tracking Act Medical Marihuana Facilities Licensing Act
General Business Considerations	The Michigan cannabis market is fast-moving and lucrative for marijuana and cannabis products. You may want to perform a competitor analysis on local pricing. There are no dispensary license caps in the state. In Michigan, retail products are restricted to the following amounts per customer per day: 2.5 ounces of marijuana Seven grams of vapor cannabinoid extract or concentrate 16 ounces of marijuana-infused solid products 36 fluid ounces of liquid marijuana-infused products 12 cannabis plants 15 grams of concentrated cannabis Michigan's Marijuana Tracking Act requires cannabis businesses to have a Point Of Sale tracking system (POS). The POS system must record each sale's time, date, price, and quantity.
Taxes	According to the Michigan Department of Treasury's Revenue Administrative Bulletin (RAB), Michigan's tax treatment of marijuana includes: 3% tax on gross retail paid by the provisioning center to the Michigan Treasury Online (MTO) 6% sales tax plus an excise tax on statewide sales 10% additional tax on recreational marijuana (tax rate is still pending approval) Late fees apply on license renewals (MMFLA Section 333.27402(11))
Cost To Open a Dispensary	License application fees are $3,000 during the prequalification phase Applicants pay an additional fee post-qualification to continue their application. This price depends on the type of dispensary or business you propose but ranges from $1,000 to $24,000 All cannabis businesses help pay the $500,000 annual fee for substance abuse disorder programs (MMFLA Section 333.27603) Initial licensure fee for a Class A microbusiness is $18,600 Renewal fees after the first year range from $1,000 to $24,000, depending on the type of business
Retail Store Regulations	According to MMFLA Section 333.27504: Retail stores cannot allow consumption of marijuana unless they have a specific consumption license and designated smoking areas Stores cannot sell food at a dispensary All store customers must be 21 years old
Dispensary Owner Requirements	No felony within ten years with the exceptions allowed in the Social Equity Program No misdemeanors involving controlled substances within five years No local ordinance violations within five years Must be 21 years old Any past issue with law enforcement or legal violations (except for traffic violations) with the exceptions allowed in the Social Equity Program
Organizations to Know in Michigan	Cannabis Regulatory Agency Licensing Division Enforcement Division Department of Licensing and Regulatory Affairs (LARA)

Note: State laws are subject to change through the passage of new legislation, rulings in the higher courts, and ballot initiatives. Please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Related Resources

Learn About Marijuana Dispensary Owner Basics

Call a Business Attorney When Opening a Marijuana Dispensary

Marijuana use in Michigan is moving steadily toward mainstream recreational use. As the cannabis regulations develop, there will be changing rules and regulations to follow in order to ensure compliance. Get your business off the ground and start on the right foot with the help of a cannabis business attorney who knows Michigan laws.

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