Marijuana Licensing Process

Learn About the Marijuana Business Licensing Process

March 1, 2022

Ready for a Cannabis License? We Can Help.

Marijuana licensing applications can be challenging and time-consuming, taking months to complete the complex and often competitive process.  

Be prepared for a long, intrusive journey as the licensing process requires business owners to be transparent with personal and financial histories. 

You may want to consider getting legal help to navigate this strenuous process.

Marijuana business licensing professionals like Joseph Nafsu can get you through it, as well as develop business goals and open the doors to success sooner with a license in hand.

Someone with the knowledge of license types, regulatory needs, and prequalification procedures can provide the critical support needed to move forward more efficiently.

Marijuana License Types

Before starting the process, it is important to consider what type of license you need and note that recreational and medical licenses are treated differently.

The history of marijuana licensing in Michigan, and the adoption of class and license types, began with the Michigan Medical Marijuana Act in 2008. Under this law, individuals were able to grow marijuana for their own medical use, or as a caregiver business with a cap on 72 plants.

Since then, licensing and regulations have evolved with new legislation.

  • In 2016, the Medical Marijuana Facilities Licensing Act (MMFLA) allowed licenses for commercial operations to process, test, and sell industrial hemp
  • In 2018, the passing of Proposal 1 legalized marijuana for recreational purposes in the state of Michigan
  • Also in 2018, the proposal became law under the Michigan Regulation and Taxation of Marijuana Act (MRTMA), and made possible recreational marijuana licensing based on types

License types are similar between medical and recreational licenses when it comes to cultivation but vary when it comes to facilities and distribution.

MRTMA license types include:

  1. Class A, B, and C Marihuana Grower: Class A growers are only allowed to cultivate 100 plants, Class B up to 500 plants, Class C up to 2,000 plants
  2. Excess Marihuana Grower: Able to hold five stacked Class C licenses
  3. Designated Consumption Establishments: Commercial spaces authorized to permit adults to consume at location, but sales and distribution are prohibited
  4. Marihuana Event Organizers: Group or company authorized to host event that will have marijuana available for sale
  5. Marihuana Microbusinesses: Entity authorized to cultivate, process, and sell products from up to 150 plants out of a storefront
  6. Marihuana Safety Compliance Facilities: Authorized to test and certify marijuana for potency and contaminants

MMFLA license types include:

  1. Class A, B, and C Marihuana Grower: Class A growers are only allowed to cultivate 100 plants, Class B up to 500 plants, Class C up to 2,000 plants
  2. Excess Marihuana Grower: Able to hold five stacked Class C licenses
  3. Marihuana Processors
  4. Marihuana Retailers (dispensary): Entity authorized to obtain marijuana from cultivators or processors and sell to the public
  5. Marihuana Secure Transporters: Authorized to transport marijuana between establishments

There is a substantial application process involved for each license type, along with annual fees and many other requirements.

Essentials of Cannabis Licensing

The Marijuana license application process requires just two steps: prequalification and final licensure.

Although this seems simple enough, the prequalification step alone includes a background check, an establishment plan, a technology plan, a marketing plan, inventory and recordkeeping plan, staffing plan, an MRA inspection, $6,000 nonrefundable application fee, purchase or lease agreements, and approval from the municipality. 

The inspection must be passed within 60 days of submission of the application, a license fee must be paid, and all requirements of the MRTMA must be met before moving on to secure a license.

The MRA regulates the state’s marijuana establishments, medical marijuana facilities, and licensees in accordance with the MRTMA rules. The Department of Licensing and Regulatory Affairs (LARA) offers applications  for both medical and recreational licenses.

Legal Help is Recommended

Success in the cannabis market begins with licensing and planning and can require a substantial amount of time and effort, as well as a well-developed legal strategy.

The good news is that help is available.

A professional like Attorney Joseph Nafsu can develop an organizational strategy that will safeguard your investment, guide you through the application step-by-step, and draft plans to highlight your processes and procedures.

Along with developing a business strategy, critical support includes help with:

  • State and local licensing applications, renewals, renewal tracking, ownership changes, location changes, and special land use licenses
  • Evaluations of financial records
  • State and local financial disclosure needs
  • Drafting a company strategy and profit projections
  • Representation at municipal hearings and administrative appeals, state and local pre-licensure inspection
  • Regulatory reviews of application materials and disclosures
  • Industry-specific employee manuals, standard operating procedures, employment and real-estate agreements, non-disclosure agreements, land contracts, and other documents

It’s a complicated task, but there’s no need to get lost in the shuffle. We have the expertise to get you through the process so you can focus on running your business.