The opportunities are endless for forward-thinking cannabis entrepreneurs in Michigan.
With a marijuana microbusiness license, you can own and operate a business growing, processing and selling small-batch cannabis to the public. Marijuana microbusinesses are an ideal business model for craft and specialty products, with inventory levels limited to 150 plants. Cannabis entrepreneurs looking to offer curated cannabis experiences and exploring new ways to interact with cannabis consumers need to consider the microbusiness option.
Being the owner of a marijuana microbusiness can provide many opportunities not previously available in Michigan’s cannabis industry. The microbusiness model is great for entrepreneurs looking to set themselves apart running a small business that is in tune with their passion and desire to participate in the legal cannabis market.
In addition to following the rules (which are still in finalization) regulating microbusinesses by the Michigan Department of Licensing and Regulatory Affairs (LARA), you will need to see if your desired municipality allows marijuana microbusinesses to operate. Each Michigan municipality receives a portion of the state’s excise tax on recreational Marijuana and that’s determined by how many provisioning centers and microbusinesses operate in the municipality. Many municipalities are not keen on having numerous provisioning center storefronts within their boundaries, however, we expect many cities and townships to jump on the microbusiness concept as it will allow them to obtain a greater share of the recreational marijuana tax revenue without the presence of numerous Marijuana storefronts.
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What’s a Marijuana Microbusiness?
Proposition One legalized recreational marijuana in the State of Michigan and created new license types for cannabis companies in Michigan. While most recreational cannabis licenses require the applicant to first have a Michigan medical marijuana license, one license type did not—the Marijuana Microbusiness.
A Michigan microbusiness license allows the holder to grow up to 150 plants, process those plants into a variety of cannabis extracts and edibles, and sell those products directly to the consumer. There are limits to what the microbusiness can do, however, as well as limits to who can be a licensee.
Microbusiness licenses are initially limited to Michigan residents, and licensees cannot hold any other recreational marijuana license. Microbusinesses also cannot sell to other licensees—they can only sell directly to consumers over the age of 21. While these requirements do restrict what a microbusiness licensee can do with the license, they also serve to protect the Michigan microbusiness market from large “big cannabis” companies that will eventually swallow up much of the Michigan market as they have done in other states such as California and Colorado.
Microbusinesses in Michigan will also be subject to two sets of regulations. First, they will be subject to state-level regulations from the Department of Licensing and Regulatory Affairs—or “LARA”. These regulations have yet to come out and are expected to be released by the end of 2019. Another potential set of regulations are municipal regulations. Municipalities are able to place additional regulations and requirements on Michigan microbusinesses that operate within their municipality, as long as such regulations are not considered to be unreasonably impractical.
So what can you do with a Michigan cannabis microbusiness license? The possibilities are endless! One of the business models we have seen that has attracted the most attention are cannabis lounges, also sometimes called Amsterdam-style coffee shops. Other business models include “tour-and-taste” operations, which are popular in California, as well as Cannabis-themed arcades, movie theaters, restaurants, and more!
Our attorneys are able to guide you through the legal and compliance process, help you hone your business model, and put you in the best possible position for success! Our managing attorney, Scott F. Roberts, has spoken at industry conferences about the microbusiness model and is one of the state’s foremost experts on Michigan microbusinesses. He has worked with small to medium sized businesses almost his entire career, is an entrepreneur himself, and is able to provide not just legal services, but business consulting and advice as well. Contact us today to schedule a free legal and business consultation!