Michigan sold USD56.8 Million equivalent of cannabis products in April, surpassing the nation’s largest cannabis market, California. So, it’s understandable if you're thinking about entering Michigan’s booming cannabis industry. 

However, the cannabis industry is full of risks, and managing it isn’t everyone’s cup of tea—especially without expert guidance. 

Whether you want to grow, process, or open a dispensary, the first thing you need to do is secure a cannabis license. 

Sounds simple enough, right? Well, it's not too complicated, but there are a few steps you’ll need to follow to make sure everything’s done by the book. 

Let’s break it down in this post.

Step 1: Know Your License Types

Michigan offers several types of Marihuana licenses, and the one you need depends on the type of business you want to run. Here’s a quick look at the options:

• Grower (Cultivator): Want to be the one growing cannabis plants? This is your license. It’s broken down into tiers based on the number of plants you’ll grow.
• Processor: If you’re interested in making edibles, concentrates, or other cannabis products, this is for you.
• Retail (Dispensary): Planning to open a retail store? You’ll need this license to sell cannabis products directly to consumers.
• Transporter: For those who want to handle the transportation of cannabis products between facilities.
• Safety Compliance: This license allows you to test cannabis for safety and potency before it hits the market.

Each license comes with its own set of rules and fees, so make sure to research the one that matches your business plan​.

Step 2: Check Local Laws

Before you even start your application, you need to make sure the city or town where you plan to open your business allows cannabis operations. Not every community in Michigan does. Some cities are all in, while others have opted out completely. 

It’s also important to check zoning regulations—many municipalities require cannabis businesses to be a certain distance from schools, parks, or churches​.

Pro tip: Some cities have caps on the number of licenses they’ll issue, so you might face competition if you’re in a popular area.

Step 3: Get Prequalified

This is where things start to get real. The first part of the application process is the prequalification phase, which is basically a deep dive into your personal and financial background. 

If you have business partners or investors, they’ll need to go through this process too. The Michigan Cannabis Regulatory Agency (CRA) will want to know that you're legit and have the financial backing to run your business responsibly​.

Few Steps Before Applying:

• Treasury Clearances for all owners and the applicant entity.
• Blight Clearance Application and rules about when it needs to be obtained.
• MRTMA Prequalification for the applicant entity.
• Special Land Use approval and Certificate of Occupancy rules (e.g., if over two years old, a Certificate of Compliance is required).
• Specific Good Neighbor Plan commitment.
• The requirement to outline how many jobs will be available and where they will be advertised.

Step 4: Secure Local Approval

Now, you’ll need the green light from your local government. This might be the trickiest part, as each municipality handles cannabis business approvals differently. 

Some have open arms, while others are much more selective. You’ll likely need to attend city council meetings, present your business plan, and show that you meet all local requirements​.

Step 5: Submit Your State Application

With your local approval in hand, it’s time to move on to the state licensing process. You’ll submit your full application to the Michigan CRA, which includes everything from your business plans to your security and operations protocols. 

Be prepared for a lot of paperwork! If you’re applying for a retail license (dispensary), you’ll need to provide a detailed floor plan, including where you’ll keep inventory and how you’ll secure the premises​.

Common Documents to be Uploaded

• Detailed ownership information, including names, addresses, and percentages of ownership for all direct/indirect owners and officers.
• Government-issued IDs for all key personnel involved.
• Proof of site control (e.g., deed, lease) and documents related to conditional land use approval and occupancy certificates.
• Blight clearance no older than 90 days from the application date.
• Comprehensive business plan requirements, including operations, security, waste management, nuisance mitigation, etc.
• Tax clearances (both income and property) for the site and all owners.

Step 6: Pay Your Fees

Let’s talk about money. Michigan charges fees at several points during the licensing process, and these can add up depending on the type of license you’re going for. 

Fees typically include an application fee and annual licensing fees. If you’re part of the state’s Social Equity Program, which aims to help those affected by the War on Drugs, you may qualify for fee reductions​.

Step 7: Stay Compliant

As mentioned above, the cannabis industry is evolving, and so are the unique challenges that businesses face today.

While it’s worth celebrating that you’ve gotten a license now, don’t forget that the real work starts now—staying compliant with Michigan’s cannabis laws. 

This means following strict rules on how you handle, track, and sell cannabis. You’ll also be subject to regular inspections and will need to keep meticulous records. Any slip-ups here can lead to fines or, in the worst-case scenario, losing your license​.

Recommended Read: How to Insure Your Cannabis Business in 2024

Becoming a Premier Michigan Marihuana Business with Frontier Risk

Getting a cannabis license in Michigan isn’t as daunting as it might seem, but it does require attention to detail and persistence. From local approval to state compliance, each step is crucial to ensure your business operates legally and successfully.

Launching a cannabis business comes with unique challenges, and having the right risk management strategy is key to long-term success. Frontier Risk offers specialized risk mitigation strategies and insurance solutions tailored to the cannabis industry. 

Whether you’re just starting or expanding your operations, our risk management and insurance experts can help protect your business from unforeseen risks.

If you’re serious about starting your cannabis journey, ensure you’re prepared for upfront costs, paperwork, and the responsibility of staying compliant. But once you’re up and running, you’ll be part of a growing industry that’s here to stay!

Recommended Read: How to Open a Cannabis Dispensary in California [2024 Guide]

Do you need further guidance? Reach out to Frontier Risk today and ensure your cannabis business is fully covered from day one!

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