What is a Marijuana Microbusiness in Michigan?
A Marijuana Microbusiness in Michigan is like a Microbrewery in the alcohol industry. A Marijuana Microbusiness is an excellent opportunity to allow an entrepreneur to launch an integrated marijuana business where, as a licensee, you can grow, process, and sell your products to adults 21 years of age or older without depending on other suppliers.
This type of marijuana license opens opportunities to the individuals with a small business mindset to develop a unique product only available from a single microbusiness location. An entrepreneur in this business segment could carve out a niche market and create a demand for a product that consumers are willing to drive the extra hour to obtain. Marijuana Microbusiness is the perfect opportunity to differentiate your product from the products offered by the masses.
Do Michigan’s marijuana laws provide for a marijuana microbusiness?
A Marijuana Microbusiness is permitted under Michigan’s Department of Licensing and Regulatory Affairs (LARA) and Marijuana Regulatory Agency Marijuana Licensees Rule 420.105. This rule provides that a marijuana microbusiness may:
- Grow and cultivate a limit of 150 plants (only mature plants are included in the plant count).
- Process and package marijuana into retail products such as concentrates, edibles or for smoking consumption.
- Sell to adults who are 21 years of age or older.
How do I apply for a license?
Navigating the license process for a Marijuana Microbusiness can be complicated, however our team at the Barone Defense Firm will guide you every step of the way.
Overall, there are two steps to the application process.
- Step one is the prequalification phase where the State will investigate your criminal and financial background. It is during this step that you are required to disclose at least one year of all financial accounts or personal business history.
- Step two is the physical facility application process. It is during this step that the State will review your plans for the physical location and review the detailed drawings and business plan.
As part of the application process the Michigan Marijuana Regulatory Agency (MRA) requires various types of information including various attestations including acknowledgment and consent to investigations, statute, and rule compliance; interest and experience; confirmation of insurance.
In addition to the above attestations, MRA also requires the following documentation, failure to submit this documentation may result in the denial of your application:
- Certificate of Occupancy for Physical Location
- Lease Agreement or Deed of Purchase
- Proof of Financial Capability
- Overall Business Plan
- Marijuana Business Location Plan that complies with Marijuana Licenses Rule 420.8
- Other Business documentation: Certificate of Assumed Name; DBA Documentation
How much does it cost to apply?
The costs associated with a Marijuana Microbusiness license application are as follows:
- The application fee is $6,000 and is non-refundable
- The license fee is $8,000
Renewal fees are based on gross retail sales
- Bottom 33%: $6,000
- Middle 33%: $8,000
- Top 33%: $10,000
What are the Pros and Cons to a Michigan Marijuana Microbusiness?
As with every type of business venture there are benefits and risks associated with the Michigan Marijuana Microbusiness. One of the possible barriers to entry in this market is the ability to find a location in Michigan that has opted into the Marijuana Microbusiness. Not all municipalities in Michigan permit the establishment of a microbusiness and some municipalities have gone as far as an outright ban on this business model. Therefore, finding a location with the right customer base for your niche product that allows for a Marijuana Microbusiness, may prove to be an obstacle to some entrepreneurs.
Another potential obstacle in this market is the limit on the quantity of plants that a Microbusiness can grow and cultivate. A Marijuana Microbusiness is restricted to 150 plants by law. However, this plant count only includes mature plants. In the summer of 2020, the MRA modified the way that a Marijuana Microbusiness could count its plants. They changed the definition of a “mature plant” to one that is at least 8 inches tall or wide. This is great news for the Microbusiness as now seeds or plants under this size are not included in the limit of 150. This allows the Microbusiness to cultivate and harvest product on a rotating basis ensuring that they have a constant supply base.
The Michigan Marijuana Microbusiness is restricted from selling or transferring any of its products to other adult-use establishments. While you can freely sell to individuals 21 years of age or older, you cannot sell to other dispensaries nor can you transfer your seeds to another marijuana grower. The intent of this rule is to enable a freestanding business model that is not dependent on other suppliers.
The Marijuana Microbusiness license is an exciting opportunity to enter the growing marijuana industry. The information provided in this blog is an overview of the Michigan Marijuana Microbusiness. If you are considering entering the Michigan Marijuana market it is critical that you engage a Cannabis attorney that will guide you throughout the regulatory requirements, license application and long-term compliance. The Barone Defense Firm has cannabis and compliance law attorneys on staff to assist you with each step of your marijuana business venture. We are here to see your new business launch and to thrive in the years to come!