Big Changes in Michigan Marijuana Licensing

Michigan marijuana licensing is changing according to a recent bulletin from the Marijuana Regulatory Agency of the State of Michigan (MRA).

BEGINNING MARCH 1, 2021 IT WILL ACCEPT APPLICATIONS FOR LICENSURE UNDER THE ADULT USE LAW (MICHIGAN REGULATION AND TAXATION OF MARIJUANA ACT/MRTMA) FROM ANY APPLICANT.

What’s the background on Michigan marijuana licensing and the implication for you?

When Prop 1 was drafted and passed by the voters in November 2018, the law contains in Section 9 a restriction that “for 24 months after the Department begins to receive applications for marijuana establishments, the Department may only accept applications for licensure” from a limited group of people. For most grow licenses and other types of licenses the right to apply was restricted to an applicant which then held an MMFLA license. It had to be the exact same group or owner. Thus, the drafters of Prop 1 gave a 2-year lead time to MMFLA licensees to jump into the Adult Use market without competition other than from other MMFLA licensees. We know how long those licenses have taken to get issued so the competition was minimal for those licensed; not quite a monopoly.

That law also contained a provision though that granted to the Department the right to reduce that 2-year timeframe restriction to one year if the Department made certain findings.

marijuana plants growing under lightsWell, guess what! As we had predicted at the beginning of this year, the State and the Agency made those findings and has decided to begin accepting applications under the Adult Use licensing statute (MRTMA) from any applicant on March 1, 2021; and not wait until November 1, 2021. 144 days from today, the State can begin accepting these AU license applications from anyone. No longer do non-MMFLA licensed businesses and individuals need to wait until November 21, 2021. They can get ready now to submit on Monday, March 1. The protection period for MMFLA licensees is almost gone.

What are some of the effects and implications which we see for Michigan marijuana licensing?

  • If you are in the process of building out a facility that you had originally intended to be licensed under MMFLA, you might rethink and go straight to AU licensure, depending upon timing and business opportunities.
  • If you are thinking of getting into the business in the State of Michigan you might now consider buying the assets of an MMFLA licensed facility and not do a stock deal; close and submit your AU application for licensure on March 1 unless you think you can get your transaction closed before then under the stock deal.
  • If you can acquire a property that can be licensed in a favorable municipality, you might pay extra to get it built out faster and be ready to go for complete licensure application March 1st. Why not just build out a small part of a larger facility, get licensed and move on, instead of building out the large scale facility at first?

Lots of planning and opportunities for existing MMFLA licensees and those non-licensed individuals and businesses who now want to jump into the AU market in Michigan 8 months earlier than originally projected. Let us advise and guide you through the license application process—it’s what we do at Cannalex Law.