Cannabis Business Laws for Michigan: Everything You Need to Know

Note: We will keep this blog updated based on the changes or additions to the cannabis business laws for Michigan. 

In November 2018, the state of Michigan took a monumental step forward when it passed Proposal 1 with 55.9% of the vote. This historic decision made Michigan the 10th state in the United States to legalize marijuana for adults. 

Michigan's cannabis industry has flourished since this legalization. In fact, the total revenue of the cannabis industry in 2023 is expected to surpass $3 billion. 

Yet, with these opportunities come a set of rules and regulations that entrepreneurs and business owners must diligently observe. 

Whether you're a prospective entrant into the cannabis industry or are already a part of this industry, a thorough understanding of cannabis law in Michigan is essential for success. 

In this post, we'll provide you with an overview of the key Michigan cannabis business laws, enabling you to run your business with compliance. 

Let’s dive right in! 

Information on Nevada cannabis laws for businesses 

The information mentioned in this post has been gathered from government websites and directories and explained for ease of compliance. 

Note: This post contains abbreviated information on Michigan’s medical and adult-use cannabis programs. 

1. General cannabis law in Michigan 

Michigan's cannabis industry is governed by a set of regulations designed to ensure the safe, responsible, and legal consumption and distribution of cannabis products. 

Here’s a breakdown of general cannabis business laws for Michigan: 

• In Michigan, marijuana dispensaries go by the name "provisioning centers." These are the places where cannabis products are legally sold and distributed to the public. 
• The Michigan Marijuana Regulatory Agency (MRA) oversees and enforces cannabis laws in the state. 
• Michigan employs the Metrc system as its state track-and-trace system. This is responsible for monitoring the movement of cannabis products from cultivation to sale. 
• Adult-use marijuana is subject to taxes: 10% excise + 6% sales (adult-use); 6% sales (medical). 
• Michigan has specific limits on how much cannabis you can possess and purchase, depending on your status: 
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• Michigan uses the spelling "marihuana" instead of "marijuana" in its official regulations. 
• Provisioning centers and marihuana retailers can offer delivery services with additional approval from the MRA. 

2. Michigan marijuana laws for possession and purchase limit 

Cannabis business laws for Michigan clearly define who can possess what amount of cannabis. And there are also some purchase limits. Let's break it down:

Daily Limits for Registered Qualifying Patients 

If someone is a registered qualifying patient, they can have up to 2.5 ounces of marijuana or its equivalent in marihuana product per day. This is the limit to keep in mind for your daily consumption. 

Daily Limits for Registered Primary Caregivers 

Registered primary caregivers, those assisting qualifying patients, also have a daily limit of 2.5 ounces per connected patient. So, if you're caring for multiple patients, remember to stay within this limit per person you're helping. 

Monthly Limits for Qualifying Patients 

When it comes to monthly limits, a qualifying patient can purchase up to 10 ounces of marihuana product per month. This includes both direct purchases and purchases made through their registered primary caregiver. 

Adult-Use Purchase Limits 

For adults aged 21 and older, purchasing marihuana has its limits. In a single transaction, you can only sell up to 2.5 ounces of marihuana or its equivalent to them. However, no more than 15 grams of that can be in the form of marihuana concentrate. 

Immature Plants for Marihuana Customers 

For customers who are into growing marihuana at home, remember that as a cannabis retailer, you can only sell a maximum of 3 immature plants per transaction to a customer. This is a limit to be mindful of if you want your cannabis business in Michigan to be compliant. 

3. Cannabis licensing in Michigan 

Starting a cannabis business in Michigan requires you to have a license. And getting a license is a multi-step process with specific requirements to ensure compliance with Michigan business cannabis laws. 

Here is some crucial information about cannabis licensing in Michigan: 

• Begin by registering your business entity with the Department of Licensing and Regulatory Affairs (LARA). 
• Be prepared for thorough background checks of all individuals associated with your business. Criminal history, felony convictions within 10 years, and certain misdemeanors or ordinance violations within five years can disqualify you. 
• The Michigan Cannabis Regulatory Agency (MRA) offers various licenses: 
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• Michigan has different classes of grow licenses for both medical and recreational cannabis, ranging from micro growers to larger cultivators. 
• You'll need local licenses or permits specific to your location. Ensure your desired location is appropriately zoned for cannabis businesses. Here’s how you can find the best location for your cannabis business! 
• Applying for a cannabis distribution license is costly, with a non-refundable fee of $3,000. Additional fees for background checks and permits apply. The Social Equity Program may reduce fees for those impacted by cannabis prohibition. 
• Applications must be submitted to the department. The state will issue various license types if approved, including retailer, safety compliance facility, secure transporter, processor, and more. 
• To secure a state license, you must meet several criteria, including compliance with state rules, local zoning regulations, and no proximity to schools or residential areas. 

4. Michigan cannabis business laws for packaging and labeling 

Packaging and labeling are crucial in ensuring that cannabis is used responsibly and safely. They not only guide consumers but also prevent unintended use. 

Here are some cannabis business laws for Michigan that govern packaging and labeling standards for cannabis businesses: 

• Michigan enforces maximum THC levels for marihuana-infused products to control potency. 
• A representative sample of marihuana must undergo testing by a marihuana safety compliance facility to verify quality and safety. 
• All marihuana-infused products must specify the amount of marihuana or marihuana concentrate on their labels. This information helps consumers understand the potency of the product. 
• On the exterior of marihuana packaging, there must be a warning label in clear, legible type, surrounded by a heavy line. The warning advises against use by pregnant or breastfeeding women and those planning pregnancy, citing potential fetal injury and developmental issues for the child. 

Effective packaging and labeling not only assist consumers in making informed choices but also contribute to public safety by preventing unintended consumption. Businesses must adhere to these laws to maintain compliance and promote responsible use. 

5. Dispensary rules under cannabis business laws for Michigan 

Dispensaries, or marihuana establishments, in Michigan, must adhere to strict rules to ensure safe and lawful operations: 

• Marihuana establishments cannot allow the cultivation, processing, sale, or display of marihuana or related items to be visible from public places outside the establishment without the use of optical aids like binoculars. 
• Cannabis dispensaries must operate only at physical addresses approved by the department. 
• Every entrance to the establishment must be secured to restrict access to authorized personnel. 
• Inventory and equipment must also be secured during and after operating hours to prevent theft. 
• Marihuana establishments cannot refuse representatives of the department the right to inspect the premises during operating hours or audit their books and records. 
• No one under 21 years of age can volunteer or work at a marihuana establishment. 
• Marihuana establishments may only sell or transfer marihuana that has been produced, distributed, and taxed in compliance with state laws. 
• Marihuana growers, retailers, processors, microbusinesses, testing facilities, or their agents must adhere to transportation limits of no more than 15 ounces of marihuana or 60 grams of marihuana concentrate at one time. 

6. Michigan cannabis business laws for taxation  

Taxation is an essential aspect of Michigan's cannabis industry, with specific regulations in place: 

• Excise Tax: Cannabis retailers and microbusinesses are subject to an excise tax of 10% on the sales price of marihuana when sold or transferred to anyone other than a marihuana establishment. This tax is in addition to other applicable taxes. 
• No Bundling: Products subject to this excise tax cannot be bundled with products or services not subject to this tax in a single transaction unless otherwise provided by the Department of Treasury. 
• Administration: The Department of Treasury administers these taxes and can create rules to ensure proper tax collection. These rules are established in accordance with the Administrative Procedures Act of 1969. 

Understanding and complying with these taxation rules is mandatory according to the Cannabis business laws for Michigan. Proper tax collection supports the regulation and growth of the cannabis industry in the state. 

7. Michigan cannabis business laws for delivery 

Michigan imposes specific regulations on marijuana delivery services to ensure responsible and secure delivery of marijuana products.

• Here’s what cannabis businesses in Michigan should keep in mind:
  
  A marijuana sales location licensee can engage in the delivery of marijuana products after agency approval of their delivery procedures. 
• Deliveries must comply with daily and monthly purchase limits and single transaction purchase limits as specified in the rules. 
• Marihuana sales locations must maintain records of customer identification, delivery addresses, vehicle details, and consent for home delivery. These records are subject to agency inspection. 
• Marihuana delivery employees must keep inventory ledgers, maintain product value limits, and return undelivered products to inventory when not on delivery.
• GPS tracking, secure communication, and adherence to delivery hours are mandatory. Employees must not transport more than the specified limits of marijuana products. 
• Any theft, loss of product, or criminal activity during delivery must be reported to the agency and law enforcement. Violations of delivery procedures should also be reported.

These regulations ensure the safe and responsible delivery of marijuana products in Michigan. 

Navigate cannabis business laws for Michigan with Treez 

With stringent licensing requirements and comprehensive inventory tracking, navigating cannabis business laws for Michigan is challenging. There’s no doubt about how complex it can be. 

However, ensuring that your cannabis business operates within the bounds of the law is crucial for long-term success. 

It's not just about avoiding penalties; it's about building a reputable and sustainable brand in this burgeoning industry. 

Fortunately, tools and cannabis POS systems are designed to simplify the compliance process and streamline your operations. And one such tool is Treez. 

Treez streamlines data management, facilitates efficient inventory tracking, and simplifies the often intricate reporting processes demanded by regulatory authorities. 

By letting Treez take care of compliance, you can focus on what truly matters: delivering exceptional products and service to your customers.