Before the legalization of cannabis in Michigan, the possession of any amount was a misdemeanor punishable by a $2,000 fine and up to one year of incarceration. However, in November 2008, Michigan voters approved the Michigan Compassionate Care Initiative, resulting in the legalization of medical cannabis. The passing of the ballot allowed patients with certain qualifying medical conditions to possess up to 2.5 ounces of cannabis, if recommended by their physician. It also allowed patients or their caregivers to cultivate 12 or fewer cannabis plants.
Brief History of Legalization In Michigan
Michigan was the 13th state to legalize the use of medical marijuana. It was also the first state in the Midwest to legalize cannabis for medical use. Soon after the legalization of medicinal marijuana, the state put forth a ballot to also legalize recreational cannabis. In November 2017, a total of 365,000 signatures placed the measure on the 2018 ballot. By November 6, 2018, Michigan voters had approved the proposal, making it the 10th state to legalize marijuana for recreational use. Under the Michigan Regulation and Taxation of Marijuana Act, persons over the age of 21 can possess up to 2.5 ounces of marijuana in public, have up to 10 ounces at home, and can cultivate up to 12 plants at home.
While the law went into effect on December 6, 2018, the very first recreational cannabis dispensaries are not expected to open until early 2020. However, Michigan has recently began issuing business licenses for the sale of adult-use marijuana products.
The Importance of Obtaining a Michigan Dispensary License
Before you can open a cannabis dispensary or similar business in the state of Michigan, you will need to obtain a license. Acquiring a license from the state is not just a suggestion but a requirement if you wish to open any type of cannabis business to the public. In addition, licenses are limited and not always available, meaning you want to get one sooner than later. Obtaining a cannabis license allows your business to remain in compliance with state and federal laws and regulations, and it can possibly protect your business against certain liabilities.
Applying For a Michigan Dispensary License
To acquire a medical marijuana dispensary license in Michigan, you will need to go through several steps, including completing a detailed application and submitting fees. Here is a more in-depth look at the process to apply for a Michigan dispensary license.
Pre-qualification is the first step of the process. During this step, the applicant and anyone else listed on the application must undergo a full background check. The pre-qualification process begins with the completion and submission of the Entry/Individual Pre-qualification Packet (EIPP).
Along with the filled out packet, you will need to submit a copy of your government-issued ID, a passport-quality photo, and other supporting documents listed on the EIPP checklist. Individuals listed on the application must also complete a Supplemental Applicant Pre-Qualification Packet (SAPP). The packets can be submitted via mail or in person, along with a non-refundable application fee of $6,000.
2. License Application
During the license application phase of the process, you will need to submit certain information and documentation based on the type of cannabis facility you are looking to open. You will need to specify an estimated opening date for your dispensary, proof of lease agreement or premises ownership, estimated gross annual income, your facility and retail marketing plan, and your plan for product inventory and recordkeeping. Once all sections of the application have been completed, you can submit the license application either online, via mail, or in person.
3. Regulatory Assessment Fee
It is important to understand the steps that follow the submission of the license application. In addition to the non-refundable application fee, you will be responsible for paying a regulatory assessment on an annual basis. According to LARA, the amount of this fee can range from as low as $10,000 to as high as $66,000, depending on the total number of licenses that have been issued in the state. If you are planning on opening a dispensary to sell marijuana for recreational use, you can expect comparable regulatory assessments. The application fee will still be $6,000, but the fees for various categories of licenses will range from $1,000 up to $40,000, depending on the license type.
Speak With Professional Cannabis Insurance Brokers
If you have opened a cannabis dispensary in Michigan or plan to open one in the near future, you will need to obtain a cannabis license before doing business. As the marijuana community is growing by leaps and bounds each day, acquiring a marijuana license can be challenging due to the competition. To learn more about applying for a Michigan dispensary license or for assistance with the process, contact the cannabis insurance brokers at MFE Insurance.