Michigan to Start Taking Applications for Adult-Use Cannabis Businesses Friday

Applications from cultivators, processors, testing labs, and transporters will be accepted, along with those from cannabis event organizers and onsite consumption establishments.
Michigan to Start Taking Applications for Adult-Use Cannabis Businesses Friday
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Regulators in Michigan will begin accepting applications for licenses to operate businesses in the state’s coming adult-use cannabis market on Friday. The Michigan Marijuana Regulatory Agency will accept applications for several different license types on its website beginning at 12:01 a.m. on Friday, November 1.

The agency expects to begin issuing adult-use licenses to companies that are already licensed to grow, process, test, and retail medical marijuana as soon as late November, according to media reports. But once those licenses are issued, it will still take months for recreational cannabis to reach consumers, according to Joe Neller, the co-founder of medical marijuana producer and retailer Green Peak Innovations, which has permits allowing the cultivation of 18,000 plants and operates four dispensaries in Michigan.

“If the state takes all of the 90 days afforded to them by law to review our application and grant us a license, then we could start producing that adult-use product,” Neller said. “It does appear the state is going to make us begin those plants basically from seed or clone, so that would take another six months to grow the product, harvest it, pas[s] testing, package it up and get it into market, so anywhere from six to nine month[s] from Nov. 1 is how we’re modeling it.”

Application fees for adult-use cannabis licenses run $6,000, whether or not a permit is eventually issued. Once a license is issued, annual renewals, starting at $1,000 for cannabis event organizers and ranging up to $40,000 for large cultivation and processing operations, are also required. Applicants are also required to carry $100,000 worth of bodily injury and liability insurance.

Medical Cannabis Businesses Given Head Start

Until 2021, only organizations that are currently licensed to operate medical marijuana businesses will be permitted to apply for licenses required for the largest adult-use cultivation and processing facilities. Robin Schneider, the executive director for the Michigan Cannabis Industry Association, said those provisions were written into the ballot proposal that legalized recreational cannabis so that medical marijuana businesses would be able to get a head start in the adult-use market.

“We knew that we needed to have the support of the medical licensees as we were moving into election day, and so that was done on purpose to ensure that their investments were protected,” she said.

Applications for businesses in the retail cannabis supply chain including cultivators, processors, testing labs, and transporters will be accepted. Other license types available include cannabis event organizers, temporary events, and onsite consumption establishments.

Regulators are unsure how much demand there will be for the state’s adult-use cannabis business licenses. When licensing for medical marijuana operations began in 2017, far fewer applications were received than authorities anticipated.

“We were anticipating a big turnout when medical started and it was more a trickle, but we’re preparing for all possibilities,” said Michigan Regulatory Agency spokesman David Harns.

The agency plans to release preliminary data on the applications it receives beginning Friday evening.

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