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Tips to Know Before Applying for Your Cannabis License in Michigan

It’s safe to state that cannabis has crawled out of the dark pits of the “stoner culture” and has emerged as a multibillion-dollar industry. As the push for legalization grows, Cannabis is taking ground in numerous sectors including agriculture, healthcare, pharmaceuticals, and consumer goods. Despite being illegal as a “Schedule I” drug under federal law, the legal U.S. cannabis industry is estimated to reach 32 billion in 2022. According to New Frontier Data, the compound annual growth rate of the legal cannabis industry is projected to see a 11% growth between 2020 and 2030, putting the industry's value at $57+ billion by 2030. 

But just like any other budding industries, it can get overwhelming to know about the countless requirements of the diverse and fast-growing cannabis industry, especially when it comes to licensing. 

Therefore, if you are interested in gaining access to this proliferating industry, we can walk you through the entire process of getting a cannabis license in Michigan with our 5 foolproof tips. 

Let’s get started! 

Michigan Cannabis License: 5 Foolproof Tips for Success 

After becoming the 10th U.S. state to legalize recreational cannabis use in 2018, Michigan’s cannabis market witnessed a substantial boom. And although the marijuana industry in Michigan is thriving owing to lucrative returns, investors must be advised that the grass isn’t entirely green when it comes to getting a cannabis license in Michigan. 

There are several risks and challenges that fresh entrepreneurs need to effectively navigate and overcome. Below, we’ve laid out some effective tips that can help you apply and receive a cannabis license in Michigan successfully.

Tip #1 – Learn about legal requirements 

It’s crucial to thoroughly research and learn about the cannabis license guidelines and procedures in the state you intend to set up marijuana business. For instance, the Department of Licensing and Regulatory Affairs (LARA) is in charge of issuing cannabis licenses to interested entrepreneurs in Michigan. Presently, retail licenses are available only for medicinal cannabis dispensaries which are generally called “provisioning centers” in Michigan. 

Under Michigan’s cannabis dispensary laws, LARA must accept applications for recreational cannabis licenses only from operators who are already authorized to trade cannabis for medical purposes. Simply put, if you are interested in selling recreational cannabis in Michigan, the only way to enter the scene is by first acquiring a medical cannabis license for a provision center. 

Remember, getting an overview of state rules and regulations, including licensing requirements, can better prepare you for a successful and smooth licensing process.

Tip #2 – Identify and understand potential ‘red flags’

Once sufficient research is performed regarding the state’s legal requirements, you must have acquired sufficient knowledge to check and determine whether there are any probable red flags or loopholes within your business plan. Identifying red flags ahead of time will make sure that your Michigan cannabis license application isn’t outright rejected. For instance, not fulfilling age or residency requirements can lead to application denials, and so can criminal convictions. Thus, it’s advised to identify all potential red flags and have a counter plan in place in advance.

Tip #3 – Complete necessary paperwork and collect supporting documents 

Once you have undertaken the previous two steps, next comes the filling of all the paperwork the state of Michigan needs for a cannabis license application. 

This step is usually rather simple: acquire applications and forms required by the state and ensure you fill them up truthfully to the best of your ability. In addition, double-check the application to make sure you haven’t left out any crucial or necessary elements. For instance, in the U.S, this will involve getting your tax number along with your Federal Employer Identification Number (FEIN) from the Internal Revenue Service (IRS). 

Here are some essential licensing and application documents that must be filled out to apply for a Michigan cannabis license. 

  • Business Plan: You won’t get anywhere without a well-rounded business plan. Consider it to be the founding stone of your cannabis startup.
  • Proof of Capitalization/Financing: Includes all documents that may assist you in proving possession of the necessary amount of capital to the licensing authority and board.
  • Location Details: Make sure the location you choose is in full compliance with the state laws.
  • List of Team Members: This comes in handy for fingerprinting and performing background checks. 
  • Security and Surveillance Plan: Detailing how you’ll manage the surveillance and security of your cannabis facility is another crucial element of the licensing process.

Tip #4 – Prepare for consultation and evaluation with the state licensing board/agency 

After you’ve submitted the cannabis license application along with the necessary paperwork to LARA, it’s time for you to patiently wait while the licensing authorities assess and review your application for approval. In general, if any issues are found, the applicant is notified by the authority and will be given an opportunity to respond.

In case everything is on point and your application gets approved the first time, you will most probably be called in for a one-on-one consultation with the licensing agency or board. You are also generally expected to make the required payment at this step. There can also be supplementary legal compliance elements post initial approval, such as fingerprinting. So, be prepared for all this. 

Tip #5 – Complete local licensing requirements

Once the licensing agency approves your Michigan cannabis license, you may have to further get approval at the local level. For this, it’s best to work with the respective municipality you are planning to set up the business in. Doing this will make sure that your business is fully compliant with the state, as well as, the local level.

Wrapping it Up…

Hopefully, with this guide, you now understand the path you’ll have to walk in order to get a cannabis license in Michigan.  Just don’t think that having a cannabis business will be a walk in the park. You might face obstacle after obstacle. However, if you are not afraid to put in a lot of hard work, stepping into the Michigan cannabis industry might very well be the best decision of your professional life.

So, get started and best of luck!

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